Rand softening May fuel price blow

Picture: Reuters.

Picture: Reuters.

Published Apr 26, 2017


Johannesburg – South African motorists can thank a strengthening Rand and softer international oil prices for lower than anticipated fuel price rises on the first Wednesday in May – but we still have to brace for it.

Earlier in April the Automobile Association was predicting a 55 cents a litre hike in the price of petrol, 39 cents a litre more for diesel and a rise of 41 cents a litre in the price of illuminating paraffin.

But, to the surprise of most industry analysts, the rand has recovered some of the losses caused by the recent cabinet reshuffle – from around R13.40 to the dollar, back to the R13.10 level – while international oil prices have dropped over the past two weeks from $50 a barrel to below $50 a barrel.

So, as it stands on the eve of Freedom Day, the AA is predicting (based on unaudited fuel price data released this morning by the Central Energy Fund) that the price of petrol will go up next Wednesday by 49 cents a litre, diesel will become 33 cents a litre more expensive, along with a 35 cents a litre rise in the price of illuminating paraffin.

Still painful, but not as bad as it looked two weeks ago. Nevertheless, the association doesn’t expect the Rand to hold on to these gains in the medium term, so don’t relax; any rise in international oil prices over the next few months could have a nasty effect on South African fuel prices.

IOL Motoring

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