Ricochet News

Another steep petrol price increase expected in July

Jun 17, 2016
Another steep petrol price increase expected in July

The ongoing strengthening of oil prices, combined with the stronger Rand/US dollar exchange rate, means South African motorists will see another steep increase in the fuel price in July, the Automobile Association (AA) announced while commenting on unaudited mid-month data released by the Central Energy Fund (CEF).

“International petroleum prices have appreciated less sharply in the month to date than was the case in the equivalent period in May, but the gains have nonetheless been significant,” the AA said.

“Meanwhile, the stronger rand/US dollar exchange rate has not been enough to counter oil’s rises, giving a risk of substantial fuel price hikes at the beginning of July.”

The mid-month data predicts a rise of up to 27 cents a litre for petrol and 61 cents a litre for diesel. Illuminating paraffin is also under pressure, with the data currently showing a 60 cent rise.

“With the cold of winter having set in, people who use paraffin for heating and cooking are poised to experience a sharp jump in their energy costs, in addition to a rise in transport-related costs,” the association said.

“Economic shocks which weaken the exchange rate could worsen the picture by month end.

“We advise South African motorists to reconsider their driving patterns and car-sharing habits in order to economise in the event that the current run of fuel price rises continues in the medium term.”