Big petrol price increase coming in July

Based on unaudited daily fuel price data released by the Central Energy Fund, fuel price increases are set to continue in July, the Automobile Association (AA) said on Thursday.

It expects the price of petrol to increase by between 43 cents and 46c cents a litre, while diesel and illuminating paraffin will be less affected, with price increases of only around 6c on the cards.

Of greater concern to the AA is the average exchange rate, which has weakened from around R11 to over R12.30 to the dollar since January.

“If this trend continues and is not offset by reductions in international petroleum prices, fuel prices will begin testing their previous record highs before the end of the year,” said the AA.

“The average rand/dollar exchange rate has weakened considerably since the end of May. The rand has lost about 40 cents against the dollar, and this has contributed almost half of the increase which is forecast for the petrol price.”

The balance of the increase was due to fluctuations in the landed prices of petroleum products.

“Diesel prices have moderated, but there was a steep spike in the petrol price in the second week of June. The petrol price has since come off this high, but not enough to prevent a considerable price increase at the pumps,” the AA said.

It regards fluctuations in international petroleum prices as anomalies in a flatter trend, and said petroleum prices remained fairly stable.

In early June the Department of Energy increased all grades of petrol by 47c/litre. Petrol went up by R1.62 in April, but remained unchanged in May.

Fin24

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Big petrol price increase coming in July