Fuel price expected to drop as exchange rate recovers

the current indicators show a decrease of between 56 and 59 cents a litre

The AA expects the fuel price to drop towards the end of the month, based on mid-month fuel price data released by the Central Energy Fund (CEF).

The ongoing oil price weakness, combined with the strengthening in the Rand / USD exchange rate, are the two major contributing factors for the expected fuel price drop, towards the end of February.

“The Rand has recouped some of its losses against the dollar and traded in a fairly narrow band since the end of January,”

the Automobile Association commented.

“This is allowing South Africans to benefit from lower international petroleum prices and provides some cushioning against any upward movement.”

Petrol users are in for much-needed relief; the current indicators show a decrease of between 56 and 59 cents a litre, with around 11 cents attributable to gains in the Rand.

Although the international price of diesel climbed slightly in the first half of February, the exchange rate offset some of diesel’s gains – without the stronger exchange rate, the increase would have been 17 cents a litre instead of the seven cents a litre currently predicted.

“It would benefit the economy considerably if the current environment of low petroleum prices and a flatter exchange rate were to continue,” the Automobile Association concluded.