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Fuel price set to increase yet again

20.05.2016

Fuel price increases at the end of May expected because of weak Rand and stronger international oil prices.

This is the view of the Automobile Association (AA), which was commenting on unaudited mid-month fuel price data released by the Central Energy Fund (CEF).

"Motorists have been fortunate in 2016 so far, with lower oil prices buffering the country from the weaker Rand," the AA said.

"However, oil has now strengthened while the Rand continues to decline, with both contributing to the current under-recovery picture."

According to mid-month data, an increase of 39 cents a litre for petrol is expected. Stronger oil accounts for around 23 cents of the increase and the weaker Rand contributes around 16 cents. Unfortunately for Diesel users, a 61 cent per litre rise is on the cards. Illuminating paraffin is expected to increase by 44 cents a litre. 

"With oil prices rising steadily, South African fuel users have lost their cushion against the Rand's ongoing weakness," the AA commented.

"Our concern over the Rand's short-term trajectory is growing; since the start of May, it has depreciated from around R14.20 to the US dollar to its current level of R15.80. If oil continues to firm, Rand weakness is set to have a severe impact on fuel users," the Association concluded.

Article written by Autodealer
20.05.2016
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