The Automobile Association says that South African motorists should be in for some fuel price relief in June.
“Our expectation for June is that petrol will drop by up to 26 cents a litre, with a 20-cent drop for both diesel and illuminating paraffin,” the AA said, commenting on unaudited month-end fuel price data released by the Central Energy Fund.
The Association pointed out that the rand had advanced against the dollar during most of May, with further support from retreating international petroleum prices.
“Both of these factors have contributed to the [predicted] reduction in the fuel price,” it said.
The AA added that Opec’s decision to continue its production cut for another nine months showed that there was concern in oil-producing nations about a continued world oversupply of oil.
This could mean a period of relative price stability, it explained. On the home front, the Association said that the background political noise affecting the rand continued to play a role.
“With political uncertainty set to continue, our medium-term outlook for the fuel price is that lower international petroleum prices will be key to maintaining local fuel price stability if the rand weakens again,” the AA said.
