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Monday, July 15, 2024

AA warns of massive fuel hikes for SA as global oil prices recover

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South Africans can expect to pay at least R1.73 a litre more for petrol and R1.74 for diesel as international crude oil prices continue to advance, Automobile Association (AA) has warned.

AA was commenting on unaudited month-end fuel price data released by the Central Energy Fund.

The rand has strengthened during the period in the question but it was not been enough to harness the huge price increase expected next week.

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“The rebound in international oil prices has been as remarkable as their fall earlier in the year. The basic fuel price for petrol and diesel in South Africa jumped from around R3 a litre on May 1 to nearly R6 a litre by June 25,” the association says.

The AA forecasts petrol will increase by around R1.73 a litre, diesel by R1.74, and illuminating paraffin by R2.14 when fuel prices are adjusted next week.

“This will be an especially huge blow to citizens who use paraffin for cooking, lighting and especially heating during winter,” the AA says.

The association says the rand had gained around 34c against the US dollar during June, but the local currency was still approximately R2.50 weaker to the dollar than before the Covid-19 crisis hit and the country’s sovereign debt rating was downgraded.

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“We cannot overstate the effect the rand’s collapse is currently having on fuel users. If it had remained at its pre-Covid-19 levels, fuel users would likely be seeing a reduction in fuel prices in the order of 75c a litre next month,” the AA says.

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