Johannesburg - International fuel prices shot up by as much as 36 cents a litre during January, but were outshone by one of the strongest rand performances in many months. As a result, South Africans can look forward to cheaper fuel prices in February.
“International prices have risen by around 11 percent in a streak starting on December 14, 2017," said the Automobile Association, commenting on unaudited month-end fuel price data released by the Central Energy Fund.
“Fortunately for South Africans, the rand/US dollar exchange rate has enjoyed a strengthening trend for almost as long, with the local currency accelerating its gains since the middle of January.”
The stronger rand means petrol is set to drop by 32 cents a litre on the first Wednesday in February, with diesel down by 17 cents, and illuminating paraffin by 20 cents.
“It is important for political leaders to note the strengthening effect the recent more hands-on governance approach has had on our exchange rate, reducing many input costs for both businesses and private citizens,” the AA said.
“However, we reiterate our concern that the government should avoid using the fuel levy to fund fiscal shortfalls, as it is a concentrated tax with rapid effects on inflation and disposable incomes.”