Johannesburg - The only thing protecting South African motorists against soaring fuel prices is the ongoing lower price of oil, says the Automobile Asssociation.
Commenting on unaudited month-end data released by the Central Energy Fund, it said: “The average rand / US dollar exchange rate used in the fuel price calculation has breezed past R16.40 to the dollar, approximately 25 percent lower than at the same point in 2015.
“If the rate had held to its 1 January level, petrol would have dropped by as much as 45 cents a litre - but now, despite the savings from the oil price, the price of petrol is set to increase by three to six cents a litre.”
The association drew a similar picture for diesel and illuminating paraffin, where oil price weakness would have seen a reduction of R1 a litre, given a flat exchange rate. In reality, the continued decline of the rand has reduced the saving to a smaller, although still very welcome, 64 cents a litre for these fuel types.
“We’ve said it before,” the AA noted. “The weak oil price means South African motorists have not yet been hit by the full effect of the rand’s fall.
“If oil prices start going up without some recovery in the value of the rand, substantial fuel price increases are likely.”