More petrol pain may be coming next month — but fuel should still be cheaper than pre-lockdown
- According to current estimates, petrol and diesel prices will again be increased next month.
- This is despite a recovery in the rand.
- There are still two weeks to go before local fuel prices are set for August.
- For more articles, go to www.BusinessInsider.co.za.
Early indications are that petrol prices may be hiked – again – in August.
The Gauteng petrol price (95) fell from R16.16/litre at the start of the year to R12.22 in May thanks to a slump in the oil price slump. But since then, prices have been hiked every month to its current level of R15.12.
According to the Central Energy Fund’s current calculations, a 34c hike in the 95 fuel price is currently expected for the first week in August. This will push the price up to R15.47 - still lower than the price of R15.84 at the start of March, before the national lockdown.
The current estimates are that the diesel price will be hiked by 68c.
Local fuel prices are determined by oil prices and the rand/dollar exchange rate. South Africa is an importer of oil, and has to pay dollar for the oil.
The rand has been one of the best performing currencies among emerging markets for the past three weeks.
It has strengthened from almost R17.50/$ last month - and R19.26 in April - to its current level of R16.60.
But the oil price has also strengthened from below $40 last month, remaining steady above that level so far this month.
In April, Brent oil plunged to below $17 in April - a 21-year low, after a slump in demand amid the coronavirus outbreak.
There are still two weeks to go before local fuel prices are set for August. A strengthening in the rand, and a weakening in the oil price, could still be good enough to keep fuel prices steady.
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