Despite the weakening Rand, consumers may experience some relief next month as the fuel price is expected to drop for a second consecutive month.
According to the Automobile Association (AA), unaudited mid-month fuel price data from the Central Energy Fund indicate that “sharp climbs in the Rand/US dollar exchange rate have been offset by ongoing declines in international petroleum prices.”
The AA predicts that as a result of this, the petrol price could drop between 55 and 64 cents per litre, while diesel could drop between 53 and 57 cents per litre and illuminating paraffin by 60 cents per litre at the end of August.
The AA explained: “The Rand has weakened considerably against the US dollar since the last week of July. Fortunately for South African fuel users, international oil prices have continued to slip, meaning there is still a reasonable prospect of a drop in the fuel price at the end of the month.”
It added that if the exchange rate had not been so poor recently, the decrease could have been bigger, possibly between 75 and 83 cents per litre.
But while the AA is confident that fuel prices will drop at the end of August due to the apparent downward trend of international petroleum prices, it warned that if the oil price stabilises, future fuel increases or decreases would be dependent on the performance on the Rand.