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Good news for motorists! Fuel price set to drop

2017-06-20 09:50

Image: iStock

Johannesburg - Rand resilience and a declining oil price have set the scene for a further fuel price drop , reports th Automobile Association (AA), commenting on unaudited mid-month data released by the Central Energy Fund (CEF). 

Current conditions suggests that road users could be looking at a petrol price decline of between 60 and 64 cents a litre at month end, with diesel showing a 60 cents reduction and illuminating paraffin 57 cents, reports the AA.

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The AA says: "The Rand remained mostly stable against the US dollar in the first half of June, with strength in the currency contributing three cents a litre to the drop. 

"The big move was from oil, which shrugged off OPEC's production quotas to drop by around 8% since the start of the month."

The Association says the fuel price will come under pressure if the three major ratings agencies downgrade Rand-denominated debt to junk status in future reviews of South Africa's credit rating. 

The AA said: "That could trigger substantial capital outflow, almost certainly leading to Rand weakness which will be heavily negative for the fuel price.
"Barring unexpected political or economic shocks in the lead-up to the next ratings reviews, we expect fuel price movements to mainly depend on international petroleum prices."


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