July fuel prices increase is going to be steep as international oil prices continue rising, Automobile Association (AA) has said.
AA says that mid-month data from the Central Energy Fund is pointing towards a petrol price increase of around R1.59 a litre, while diesel looks set to go up by R1.48 and illuminating paraffin by R1.94.
However, the latest daily prices hint that the increases could be slightly less than the above-mentioned, if current trends persist.
“Oil is continuing its march back towards its previous levels in the first half of June, setting the scene for further hefty fuel price hikes going into July,” the AA said.
“The basic fuel price used in South Africa has jumped by eight percent since 1 June, with higher peaks, as international oil prices claw back some of the massive declines of the past four months,” the AA says.
“With world demand expected to continue to increase, South Africans must likewise expect the fuel price to gradually edge back towards pre-Covid-19 levels.”
On the upside, the AA said that it will likely take at least a few months for international oil prices to return to their previous levels, which means that for now at least, motorists do have a bit of a breather.
“South Africans are also benefiting from increasing rand strength, with the local currency having made up 60c against the US dollar since the start of June, and briefly breaching the psychological R17 to the dollar mark,” the AA added.
“In fact, the Rand’s firmer performance in June has offset the fuel price increases by around 36 cents a litre to date.”