Ongoing Rand strength has outmuscled a climbing oil price, raising the possibility of substantial fuel price cuts this month end. This is according to the Automobile Association (AA) which was commenting on unaudited mid-month fuel price data released by the Central Energy Fund.
“The Rand firmed substantially against the US dollar in the first fortnight of August,” the AA commented.
“However, international petroleum prices showed a sharp jump over the same period. Fortunately for South Africans, the Rand is ahead in the contest, and the current data indicates considerable price reductions at month end.”
Petrol is slated for a reduction of up to 69 cents a litre, diesel 94 cents, and illuminating paraffin is showing a potential drop of 92 cents.
“The fuel price for September will depend on whether the Rand can continue to counter upward trends in international petroleum prices,” the AA commented.
“Any flattening out of the Rand’s gains would be negative for the fuel price, but there would have to be a substantial reversal for the current picture to be spoiled before the end of August,” the Association concluded.