South African motorists can expect a “substantial” fuel price drop at the start of July 2019 thanks to lower international oil prices throughout June, according to the Automobile Association.

The AA, which was commenting on unaudited month-end fuel price data released by the Central Energy Fund, said the reduction “could have been greater” had it not been for the performance of the rand.

The Association said it was expecting petrol to drop by 86 cents a litre, diesel by 68 cents and illuminating paraffin by 58 cents.

"June was the weakest month for oil in the last quarter, with crude briefly slipping below $60 to the barrel at mid-month," the AA said in its statement.

"However, renewed tensions in the Middle East and a downturn in USA oil inventories have put pressure on the commodity, which has ticked up over the past few days."

Meanwhile, on the home front, the AA said a “damaging spat” over the mandate of the Reserve Bank sent “jitters through investment markets”. As a result, the rand's daily exchange rate against the dollar spiked by more than 60 cents.

"Although the currency re-strengthened against the dollar towards month-end, the exchange rate average for the month is negative by about 11 cents, meaning fuel users missed out on an even bigger drop," the AA commented.

The AA said the prime driver of fuel price movements for the third quarter of 2019 was likely to be the oil price, adding current tensions between the USA and Iran could have “severe ramifications”.

"South Africa's economy would be very badly affected if, as earlier in the decade, we were to return to sustained prices in excess of $100 per barrel. In such an environment, any event which affected the rand markedly would have a dire effect on fuel users," it said.