Commenting on unaudited mid-month fuel price data released by the Central Energy Fund, the Automotive Association (AA) has predicted that the petrol price will increase again in August.
Despite this, the AA noted that the increase to fuel prices expected for August is less pronounced than those which have taken place over the past few months.
“In the past ten days, though, oil has been priced in a narrower band, and we believe this might represent a more stable price plateau as the world oil market continues to rebound from the dramatic price plunges of April,” said the AA.
Current data analysed by the AA shows the price of fuel could change as follows:
- Petrol – 35c per litre increase
- Diesel – 68c per litre increase
- Illuminating Paraffin – 63c per litre increase
Fuel prices still below pre-lockdown levels
The AA said that despite these increases, fuel prices remain below the levels they were at before the lockdown took place.
“This will still leave our fuel prices below their pre-lockdown highs notwithstanding the Rand currently being pegged about two Rand weaker to the dollar than it was then,” said the AA.
However, despite this good news, the AA warned motorists that fuel price increases are likely to continue.
“Despite our cautious optimism that stability is creeping back into the market, we still advise motorists to expect further fuel price rises in the short term,” said the AA.
Alongside stabilising fuel prices, the AA also noted the Rand’s stability as another sign that fuel prices could stabilise.
“Since 19 June, the local currency has traded in a daily band between R16.40 and its current level of around R16.80 to the dollar, which is a narrow range by comparison to what we have seen since March,” it noted.
The AA said there was some Rand over-reaction to the local and global bad news over the past three months.
“We’re hopeful the correction will continue towards more optimistic valuation levels,” the AA said.