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Weak Rand, Gordhan controversy affect SA fuel prices

2016-09-15 12:30

POLITICAL INFLUENCE: The recent investigation into finance minister Pravin Gordhan has had a negative effect on the exchange-rate and fuel price. Image: iStock

Cape Town - South Africa's recent period of fuel price reductions is set for a reversal as the weakening Rand and stronger international petroleum prices combine at the pumps.

This is the view of the Automobile Association (AA), which was commenting on unaudited mid-month fuel price data released by the Central Energy Fund (CEF).

Political influence

The AA said: "The Rand's slow, steady appreciation against the US dollar during July and August was dealt a considerable setback by the controversy surrounding the Hawks' investigation of finance minister, Pravin Gordhan.

"At around the same time, international petroleum prices began to appreciate, and the combined effect will be particularly significant for users of petrol."

READ: Oil strength, Gordhan jitters put the brakes on SA fuel drop

While diesel and illuminating paraffin are currently showing increases of around 24 cents per litre, the current data on petrol shows the hike is likely to be around 51c.

The AA added: "With the Rand still on a weakening trend against the US dollar, the fuel price move at the end of September will depend largely on international petroleum prices.

"Any significant international event which leads to further oil price strength is almost certain to be bad news at the pumps for South Africans."

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