The Automobile Association has warned South Africa to brace for “extraordinary” fuel price increases at the start of July 2020.

Commenting on unaudited month-end fuel price data released by the Central Energy Fund, the AA pointed out international crude oil prices had “continued to advance, setting the stage for extraordinary fuel price hikes despite rand strength during June”.

“The rebound in international oil prices has been as remarkable as their fall earlier in the year. The basic fuel price for petrol and diesel in South Africa jumped from around R3 a litre on 1 May to nearly R6 a litre by 25 June,” the Association noted.

The AA predicts petrol will increase by around R1,73 a litre, diesel by R1,74 a litre and illuminating paraffin by a “massive” R2,14 a litre when fuel prices are adjusted in the first week of July.

“This will be an especially huge blow to citizens who use paraffin for cooking, lighting, and especially heating during winter,” the AA said.

The Association added the rand had gained around 34 cents against the dollar during June, but that the local currency was still approximately R2,50 weaker to the dollar than before the COVID-19 crisis hit. In addition, the country’s sovereign debt rating had been downgraded.

“We cannot overstate the effect that the rand’s collapse is currently having on fuel users: if the rand had remained at its pre-COVID-19 levels, fuel users would likely be seeing a reduction in fuel prices in the order of 75 cents a litre next month,” the AA said.