The fuel price was set to drop substantially in July as a result of lower international oil prices, the Automobile Association (AA) noted today.
Based on the unaudited month-end fuel data by the Central Energy Fund, the association estimated a drop of 86 cents per litre in petrol, 68 cents in diesel and 58 cents in illuminating paraffin.
“June was the weakest month for oil in the last quarter, with crude briefly slipping below $60 a barrel at mid-month.”
The reduction could have been greater had it not been for the rand, said the AA.
"Although the currency re-strengthened against the dollar towards month-end, the exchange rate average for the month is negative by about 11 cents, meaning fuel users missed out on an even bigger drop."
Movement in the fuel price for the third quarter of 2019 would predominately come from the price of oil given the current tensions between the United States and Iran, AA added.
"South Africa's economy would be very badly affected if, as earlier in the decade, we were to return to sustained prices in excess of $100 per barrel.”
The current inland price of fuel is R16.76 per litre.
“In such an environment, any event which affected the rand markedly would have a dire effect on fuel users." the association concluded.
