Motorists across the country will have some relief in February due to the consistent decline in oil prices since mid-January, according to the Automobile Association (AA). With the use of unverified data from the Central Energy Fund, AA foresees a drop in fuel prices across the board as a result of a rebound in the oil price.
The AA anticipates that 95 Octane Petrol will drop by about 13 cents a litre. Reductions for other petrol, however, are less significant. 93 Octane Petrol and both grades of diesel will decrease by four cents and illuminating paraffin will go down by three cents.
The AA claims that “Rising tensions between the USA and Iran in the opening days of 2020 sparked a sharp increase in international oil prices, but the commodity has rebounded quickly”
“In fact, the oil price has returned to a level we might have expected had the US-Iran flare-up not taken place at all,” they add.
Oil is currently at its cheapest it’s been since the beginning of December. The exchange rate, however, may cause some bumps in the road. The rand is consistently weakening against the US Dollar, with it decreasing from around R14.05 to the Dollar to R14.30 to the dollar since the beginning of January. The AA is worried about the weakening Rand, saying that “It is not a good sign of confidence in the South African economy.”
“We’re pleased fuel prices have managed to tread water at the start of a year, a year which is likely to again be extremely economically challenging,” the AA said.