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Stronger rand to take the edge off SA’s August petrol price hike

Stronger rand to take the edge off SA’s August petrol price hike

28 July 2020


Fuel prices are set to go up again in August, but the good news is that the strong performance of the South African rand in the second half of the month has kept the increases to a minimum, at least in the case of petrol.

Late month data released by the Central Energy Fund implies that petrol prices are likely to rise by between 6 and 11 cents a litre if current trends continue for the next three days. Those driving diesels are not so lucky, however, with the price of that fuel set to increase by between 44 and 50 cents a litre.

Earlier in the month it had been predicted that petrol would increase by around 35 cents a litre and diesel by 68 cents.

Thanks largely to the stronger rand, South Africa’s petrol price equation has actually been positive for the second half of July, however a negative equation earlier in the month has still skewed things towards a slight increase for August. If the equation remains in the green during August, a small petrol price reduction could be on the cards for September.

At the time of writing, the rand was trading at R16.57, while Brent Crude oil was trading at $43.90 a barrel.

Even with the small increases, South African fuel prices will still be below their pre-lockdown highs, notwithstanding the rand currently being pegged about two rand weaker to the dollar than it was then.

“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,” the Automobile Association warned earlier this month.



Source: Independent Online

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