South Africa’s fuel-price increase in the first week of August 2020 won’t be quite as aggressive as initially predicted, says the Automobile Association.

Still, despite a “surprise upside” from the rand, global oil prices pushed higher in July, setting the stage for fuel-price hikes.

As things stand, petrol is likely to increase by between nine and 16 cents a litre, diesel by up to 48 cents a litre and illuminating paraffin by 43 cents a litre, said the AA, commenting on unaudited month-end fuel price data released by the Central Energy Fund.

"Oil traded in a fairly tight range throughout July, but it was a substantial climb at the beginning of the month, plus some recent volatility, that combined to push prices higher," the AA said.

It noted diesel and illuminating paraffin were “more affected” by these swings than petrol.

The Association added the “steady strengthening” of the rand during July appeared to “confirm the view of some economists that the currency is undervalued”.

"The rand gained eight cents against the US dollar during July and the average exchange rate has firmed to below R16,90. With so much negative news surrounding the economy, the rand's firmer trend is welcome, but we would like to see the government support this trend in the area of economic policy certainty," the AA said.

The Association added that without the rand’s good performance this month, the increases would have been higher, and that they are “solely attributable to increasing oil strength”.

"With the level of global economic turmoil that currently prevails, predicting a 'normal' band for oil is near-impossible; we advise motorists to be pragmatic about the possibility of further increases, and to plan their budgets accordingly," the AA concluded.