Johannesburg - The recent ‘emerging market chaos’ triggered by Trump's playground scrap with Turkey and other economic maladies has put already-overstretched South African motorists and commuters at risk of another fuel price hike at the beginning of September.
The extreme volatility in the exchange rate that we’ve seen this week is making it harder than usual to predict the direction that the fuel price will take.
The rand and international oil prices remained stable in the earlier parts of the one-month cycle that will determine September’s fuel price (27 July to 30 August), and in fact the trend was leaning towards a small price decrease for both petrol and diesel.
Although oil prices have remained subdued, a steep depreciation in the rand threatens to push things the other way, according to the Automobile Association:
“Mid-month data suggests a fall in petrol of around two cents, with four cent and eight cent drops predicted for diesel and paraffin respectively.
“However, the daily exchange rate for the rand fell nearly nine percent against the US dollar in two days after the news of Turkey's troubles broke, and remains well above its recent trend,” the AA said.
“This has tipped petrol towards a likely increase at month end, and substantially offset the gains made by diesel and paraffin.”
Ultimately, unless the rand can reverse most of the losses incurred this week, motorists will be dealt yet another blow at the beginning of September.