July fuel price uncertainty looms as oil continues to battle rand

With the price of oil on the rise, more fuel hikes could be on the cards from July.
With the price of oil on the rise, more fuel hikes could be on the cards from July.
Image: Vladyslav Starozhylov /123rf

Rand strength is keeping rampant international oil prices mostly at bay, but only petrol is currently set for price reductions, with other fuel types poised to increase. That's the word from the Automobile Association (AA), which was reporting on unaudited mid-month fuel price data released by the Central Energy Fund.

“So far, we've seen some quite sharp increases in the landed prices of fuel this month, especially for diesel. This has come somewhat unexpectedly after the long decline in the basic fuel price throughout May,” says the AA.

The AA says that much of the oil price increase has been offset by the rand, which performed strongly against the US dollar throughout the first half of June.

At this mid-month stage, the association is forecasting a six cents a litre decrease for petrol. The picture for diesel is less rosy and is showing an increase of around 20c/l, with a 14c/l increase for illuminating paraffin when prices are adjusted for July.

“However, these forecasts could all change by month-end, as the rand looks to be flattening out while international oil prices are on an upward climb. Much as we hope for the current picture to continue, SA might well be looking at across-the-board fuel price increases for July,” it concludes.

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