Motorists can expect another hike in the petrol price in June if global oil prices and rand volatility keep on the current path.<\/p>\n
Consumers are still reeling from a 50 cents hike<\/a><\/strong> in the fuel price at the start of May, but the hike was about half of what it would have been if the department of energy had taken its adjustment data a day later.<\/p>\n According to the Central Energy Fund, by the end of April, the under recovery in the petrol price was sitting close to R1.00 per litre of petrol – a price point which was driven by the climbing global oil price, and the much weaker rand during the past week.<\/p>\n Entering into May, these trends have not abated, with the current under recovery sitting at close to 80 cents a litre<\/strong>.<\/p>\n On the oil front, it has been a bad start to the week, with the global oil price reaching its highest point since 2014 on Monday, before pulling back slightly on Tuesday. The oil price is currently around $70 a barrel.<\/p>\n According to analysis by Bloomberg<\/a><\/strong>, oil price volatility is being spurred by speculation around US president Donald Trump’s position on Iran – whether or not he will pull out of a 2015 deal with the oil-producing country and impose more sanctions on it.<\/p>\n Analysts are split, with some predicting that the split will happen, while others believe the US will stay committed, and sign side-deals with other countries to get what it wants.<\/p>\n On the rand, things look slightly worse for South Africa’s petrol prices.<\/p>\n The review which pushed the petrol price up by 50 cents saw the average rand\/US Dollar exchange rate for the period move up to R11.99 from R11.85 before. The currency has weakened significantly more since then.<\/p>\n By 09h00 on Tuesday, the rand was trading at R12.51 against the US dollar, with its weakened position driven by the strengthening US unit.<\/p>\n The dollar climbed back towards its highest level of 2018 on Monday with more investors going long as the probability of a rate hike by the Federal Reserve shifted to near certain, diminishing the appeal of high-yield currencies such as the rand, Reuters<\/a> <\/strong>reported.<\/p>\n Lower global prices for gold, one of South Africa\u2019s key exports and sources of foreign currency, also weighed on the rand, it said.<\/p>\n Speaking on the May petrol price increase at the end of April, the Automobile Association said that if the rand doesn\u2019t appreciate significantly against the US dollar – and if international oil prices don\u2019t decrease – an increase in the petrol price June is unavoidable.<\/p>\n
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