June’s declining oil prices may be a blessing in disguise for South African motorists who have been paying sky-high prices for the precious resource.
The Automobile Association (AA) commented on the unaudited month-end fuel price data released by the Central Energy Fund, saying that without the decline in the price of oil, the fuel price hike for July may have been far higher than it is currently projected to be.
“The average rand/US dollar exchange rate used to calculate the basic fuel price has slipped in a virtually straight line since the start of June,” the AA said. “The month began with the rand at around R12.65 to the dollar, but the average currently stands at nearly R13.30. Fortunately, international oil prices have retreated at a similar rate, resulting in a fairly moderate fuel price increase outlook for July.”
The international price of petroleum and the strength of the rand against the US dollar are two very important factors which influence the price of fuel on a monthly basis.
Petrol is expected to rise by approximately 26 cents per litre, diesel by 24 cents per litre and illuminating paraffin by 20 cents. Although this rise is not as sharp as June’s petrol price hike, the ever-weakening rand could have very serious implications for South Africa’s drivers.
“If oil had remained flat in June instead of declining, price increases of 40 cents a litre would have been likely for July. And if it had followed its upward path of May, the increase would have been nearly 80 cents,” the AA said.
If this increase does go ahead the Department of Energy will announce the adjustments on Friday, 29 June.
95 Octane fuel will rise to R16 per litre (inland), while 93 octane fuel is expected to cost R15.80 per litre.
Coastal fuel prices will hover around R15.30 per litre.
This is what motorists can expect to pay in July:
95 Petrol – R16.05
93 Petrol – R15.80
0.05% Diesel (wholesale) – R14.43