Steeper fuel price increases for June

transportation and ownership concept - man pumping gasoline fuel in car at gas station; Shutterstock ID 154471376

transportation and ownership concept - man pumping gasoline fuel in car at gas station; Shutterstock ID 154471376

Published May 20, 2016

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While recent times have seen the rand and international oil prices balancing each other out enough to keep fuel prices relatively stable, both have been conspiring against South African motorists this month.

Commenting on mid-month fuel price data released by the Central Energy Fund, the Automobile Association is predicting a larger-than-usual fuel price increase in June, with petrol looking set to increase by around 39 cents a litre, while diesel could go up by approximately 61 cents and illuminating paraffin by 44 c/l.

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"Motorists have been fortunate in 2016 so far, with lower oil prices buffering the country from the weaker Rand," the AA said. "However, oil has now strengthened while the Rand continues to decline, with both contributing to the current under-recovery picture."

According to the association, the stronger oil prices account for around 23 cents of the projected rise while our currency is responsible for 16 cents.

Also of concern to the AA is how the rand's short-term trajectory is growing, having depreciating from around R14.20 at the beginning of May to its current level of R15.80.

Should the currency continue to weaken, and oil prices continue on their current upward trajectory, South Africans will inevitably face even steeper price increases in the months to come.

Motoring.co.za

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