Ricochet News

Fuel price shock in April likely - AA

Fuel price shock in April likely - AA

The Automobile Association (AA) has warned that the price of petrol could increase by as much as 83 cents a litre for April if international oil prices continue to rise.

In a statement, the association said the 30 cents increase in the fuel levy announced by Finance Minister Pravin Gordhan during budget speech last month, is also likely to have a significant impact on the price of diesel, which could go up by as much as 95 cents a litre.

“Although the Rand / US dollar exchange rate has firmed in the Rand's favour over the past few weeks, the strengthening of international petroleum product rises has outstripped the Rand's gains,” the association said.

“Any associated deterioration in the exchange rate will add more pressure. A combination of sustained oil strength, and a ratings downgrade before year end, would be very negative for motorists”.

On Wednesday, the national currency dropped below the R15 / $ level for the first time since December, after US Federal Reserve chair, Janet Yellen, cautioned against a possible slowdown in the country’s economy amidst reports of interest rate hikes.

A short while ago, the Rand was trading at R14.94 against the US Dollar with Brent Crude Oil trading at $40.67 a barrel.