Johannesburg - The month of April has been rather kind to the rand, with the local currency even hitting a four-month high, but unfortunately for motorists the currency's recent strength is not going to translate into lower petrol prices as those gains have been outweighed by stronger international oil prices.
Analysing the Central Energy Fund's unaudited month-end data, the Automobile Association is predicting a petrol price increase to the tune of 12 cents a litre in May, although the cost of diesel is looking set to drop by around three to four cents a litre.
The latter is good news for the inflation outlook, given how many of our goods are transported by diesel trucks, but the rise in international oil prices is a worrying trend. Had the rand not appreciated during April, South Africans would have been facing a 42 cent price petrol price increase in May, according to the AA.
"International petroleum prices have settled into a pattern of gains which are not always being overcome by recent rand strength against the dollar," the AA commented. "We forecast steady rises in the price of fuel in South Africa in the short to medium term, with the possibility of larger spikes if the rand comes under pressure."