The Automobile Association says “retreating oil prices have painted a rosier picture” for local fuel tariffs, with the possibility of more good news to come.
Brent crude oil laboured above $70 a barrel during the past couple of months as a result of the ongoing “tug-of-war” between the OPEC countries, which favour the current output restrictions, and the United States, where production is in full force. However, since the end of May, the price of oil dropped significantly, with the commodity now trading at around $61 dollars a barrel.
At this stage, the latest data predicts that the petrol price will decrease by by 91 cents, diesel by 70 cents and illuminating paraffin by 62 cents.
“South Africans are not getting full value though,” the AA said, attributing this to the government’s recent remarks about the future of the Reserve Bank. “After a period of sustained price stability, the rand weakened substantially against the US dollar, taking some of the shine off oil's retreat.”
However, the AA says there might be some good news on the cards “if stability returns to the rand and oil settles at its lower level”.