The Automobile Association says South Africa’s fuel prices look set to creep up at the start of August 2020.
Commenting on unaudited mid-month fuel price data released by the Central Energy Fund, the AA pointed out oil's recent price advances had slowed in the first half of July, “putting a ceiling on potential fuel price increases” as the rand traded mostly flat against the dollar.
According to the AA, the data pointed to fuel-price rises of around 35 cents a litre for petrol, 68 cents a litre for diesel and 63 cents a litre for illuminating paraffin.
"This will still leave our fuel prices below their pre-lockdown highs notwithstanding the rand currently being pegged about R2 weaker to the dollar than it was then. Despite our cautious optimism that stability is creeping back into the market, we still advise motorists to expect further fuel price rises in the short term," the AA said.
The Association noted oil climbed slightly in the first few days of July, accounting for the bulk of this month's increase to date.
“In the past ten days, though, oil has been priced in a narrower band, and we believe this might represent a more stable price plateau as the world oil market continues to rebound from the dramatic price plunges of April," the AA said.
The Association further noted the rand too had been “unusually stable” over the past month.
"Since 19 June, the local currency has traded in a daily band between R16,40 and its current level of around R16,80 to the dollar, which is a narrow range by comparison to what we have seen since March.
“It seems that there was some rand over-reaction to much of the bad news – both globally and domestically – over the past three months. We're hopeful the correction will continue towards more optimistic valuation levels," the AA concluded.