Oil prices fall, but experts warn of another petrol price hike in May

APRIL 18, 2016

While oil prices on the international market fell on Monday after key oil producers failed to negotiate a curb on their output, the Automobile Association of South Africa warned motorists that mid-month data released by the Central Energy Fund points to a petrol price increase of between 17 and 18 cents a litre in May. Diesel though looks set to drop by 11 cents.

The latest increase forecast comes after consumers were hit with an 86 cent petrol price increase and 96 cent diesel price hike at the beginning of April, of which 30 cents formed part of an increase in the general Fuel Levy.

According to the AA, next month's projected increases are the result of international oil prices, which have been partially offset by a stronger rand, but not enough to avoid a petrol price increase.

On Monday, a barrel of brent crude was US$42.17, after trading well below $40 for most of 2016, while the rand was trading at R14.59 to the dollar - close to its best level this year.

"Both the exchange rate and international oil prices continue to be volatile, and the month-end picture could be quite different from the current one," the AA cautioned.