The Automobile Association says that South Africans have been “thrown a lifeline” by declining oil prices in June, explaining that without oil's fall, the fuel price hike for July would have been far higher.
"The average rand/ dollar exchange rate used to calculate the basic fuel price has slipped in a virtually straight line since the start of June," the AA said, commenting on unaudited month-end fuel price data released by the Central Energy Fund.
"The month began with the rand at around R12,65 to the dollar, but the average currently stands at nearly R13,30. Fortunately, international oil prices have retreated at a similar rate, resulting in a fairly moderate fuel price increase outlook for July."
International petroleum prices (oil), and the rand strength against the dollar, are the two primary factors that influence the fuel price on a monthly basis, says the AA.
Petrol is set to rise by around 26 cents a litre, diesel by 24 cents and illuminating paraffin by 20 cents. But the AA warned that any uptick in oil prices could have serious implications for South Africans if the rand continued to slide.
"If oil had remained flat in June instead of declining, price increases of 40 cents a litre would have been likely for July. And if it had followed its upward path of May, the increase would have been nearly 80 cents."
If this expected increase materialises, 95 octane fuel inland is set to breach the R16-a-litre mark, while 93 octane fuel inland will touch on R15,80 a litre. Coastal prices for petrol will hover around R15,30 a litre.
Given the increased cost of fuel in South Africa, the AA again urged government to “reconsider the high cost of the added taxes” that account for up to one third of the petrol price. Currently, R5,30 of every litre of petrol sold is paid towards the General Fuel Levy and the Road Accident Fund Levy.
The Association advised motorists that it predicts further fuel price hikes, driven by South Africa's weak economic position and potential fallout from trade tariff disagreements between the United States and other nations.
"Combined with lower wage hikes and the increasing cost of living, the expenses of commuting by private car might spiral beyond many motorists' reach. Commuters who would never previously have considered public transport or carpooling may soon have no option," the AA concluded.
Ryan has spent most of his career in online media, writing about everything from sport to politics and other forms of crime. But his true passion – reignited by a 1971 Austin Mini Mk3 still tucked lifeless in a dark corner of his garage – is of the automotive variety.