Petrol price expected to rise, but diesel price should fall in August, says AA
Fuel price outlooks are showing modest changes in all grades of fuel. This is according to the Automobile Association (AA) which was commenting on unaudited mid-month fuel price data released by the Central Energy Fund.
“The current picture shows petrol increasing by around 4c/l. On the upside, diesel is indicating a 16c decrease, with illuminating paraffin down by 10c,” the AA says.
“The rand's average exchange rate was virtually flat against the US dollar in the first two weeks of August — it has moved less than 3c. But the local currency is trending weaker, and this may weigh more heavily against the fuel price by month-end,” the AA notes.
The association says the bulk of the fuel price change came from slight declines in international petroleum prices.
“Oil fell throughout the first week in August, flattened out, and subsequently fell further. If this trend is maintained, there is a possibility of price decreases for all fuel grades by month end. This would bring some welcome relief after last month's heavy increases.”
The Organisation of Petroleum Exporting Countries (Opec) cartel, which had limited oil production due to decreased demand during the pandemic, announced in July that it would increase output by 400,000 barrels a day from August until the previous restriction had been eliminated.
“This should improve oil price stability throughout August,” the AA says, “though it could be countered by Covid-19-related uncertainty as new variants of the disease affect economic activity worldwide.”
The AA commented that the SAPREF refinery which was shut down under force majeure due to the recent unrest had been slated for restart on July 21, and that the refinery had indicated this would take around 10 days to complete.
“We therefore don't anticipate fuel shortages related to either the refinery or bulk transport of fuel by road. Indications are that the N3 corridor between KwaZulu-Natal and Gauteng is stable and has not experienced significant disruptions since it was reopened, which is encouraging,” the association concluded.
Would you like to comment on this article? Register (it’s quick and free) or sign in now.
Please read our Comment Policy before commenting.