According to the AA, in the last quarter June was the weakest month for oil. The price of crude oil slipped briefly below $60. (Oupa Nkosi/M&G)
The Automobile Association (AA) is expecting the fuel price to decrease in July, due to lower international oil prices throughout June. The association is commenting based on the unaudited month-end fuel price data released by the Central Energy Fund.
According to the AA, in the last quarter June was the weakest month for oil. The price of crude oil slipped briefly below $60.
The petrol price is anticipated to fall by 86c a litre, diesel by 68c and illuminating paraffin by 58c next month.There could have been higher decrease if in earlier years the rand had not been impacted, the AA said.
The AA said that: “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.”
They further added that: “However, renewed tensions in the middle East and downturn in USA oil inventories have put pressure on the commodity, which has ticked up over the past few days.”
The company said in a press release on Thursday that it is looking forward that the oil price is likely to be the primary driver of fuel price movements for the third quarter of 2019. Current tension between the US and Iran could have serious ramifications.
“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. In such an environment, any event which affected the Rand markedly would have a dire effect on fuel users,” the AA concluded.