• Petrol prices look set to rise by 23c a litre, and diesel by 38c in July, the AA says.
• Oil prices have rallied to the highest levels since 2018 amid expectations that global demand may return to pre-pandemic levels sooner than expected. 
• The rand’s “alarming” slump over the past two weeks could bring more bad news.

South Africans will face fuel price hikes in July.

Using current information from the Central Energy Fund, the Automobile Association (AA) forecasts that petrol looks set to increase by around 23 cents a litre, diesel by 38 cents and illuminating paraffin by 32 cents.

This increase is going to be very difficult for those who use paraffin for cooking, lighting, and especially heating as South Africa heads into the heart of winter,” said the AA.

Petrol and diesel prices are largely determined by the oil price, as well as rand strength – given that SA must buy oil in US dollar.

Oil prices have rallied over recent weeks, reaching their highest levels since 2018 last week amid expectations that global demand may return to pre-pandemic levels more quickly than previously anticipated.

“International petroleum prices have climbed throughout June. Even some marginal gains on the rand have not been enough to counter the rise.”

On average, the rand was positive against the dollar during June, but the daily exchange rate has sagged alarmingly since mid-month, weakening from around R13.75 to the dollar to nearly R14.30, the AA said.

“If the rand continues to slide with oil on an upward trajectory, this could bring further bad news for South Africa’s economy.”

Fuel prices are adjusted by the Department of Mineral Resources and Energy on the first Wednesday of every month.

In the first week of June, both unleaded 95 petrol (R17.13 per litre), and unleaded 93 (R16.91) were cut by 10 cents per litre.

Diesel (0.05% sulphur) was hiked by 20 cents per litre and diesel (0.005% sulphur) increased by 21 cents per litre.

SOURCE:

Petrol, diesel prices set for hike in July – AA | Fin24 (news24.com)