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AA warns over Finance Department developments despite April fuel price drop

28.03.2017

The Automobile Association (AA) has warned that while the price of fuel will drop for April, the recent unexpected recall of Finance Minister Pravin Gordhan could have a lasting impact given the sudden drop of the Rand.

Despite the inclusion of fuel levy increases announced by Gordhan in his budget speech last month, the price of petrol will, based on current data, drop by 24 cents a litre, diesel by nine cents and illuminating paraffin by ten cents.

It however stated that the decision by President Jacob Zuma to recall Gordhan from an investor conference in London on Monday, shows that "uncertainty persists around key political figures in the Ministry of Finance".

"In our view, the Presidency was ill-advised to call off the Treasury's international road show at such short notice with so little detail given. The resultant sharp weakening of the Rand again demonstrates the importance of political and fiscal stability to investors," the association said in a statement.

It also warned that any further weakening of the Rand could have a substantial impact on lower income families dependant on public transport and paraffin.

"Lower-income citizens are disproportionately affected by fuel price hikes arising from Rand weakness. The government's lack of sensitivity towards investor risk appetite is directly contributing to increased hardship for the poor," it said.

A short while ago, the national currency was trading at R12.95 against the greenback with Brent Crude Oil at $51.12 a barrel.

Article written by Autodealer
28.03.2017
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