Fuel prices climb as Rand slumps
No petrol reprieve expected for motorists
THE weak rand to US dollar exchange rate will most likely cause petrol and diesel prices to spike.
According to the Automobile Association of SA (AA), the currency’s collapse has taken the shine off ongoing international oil price weakness, which AA dubbed the ‘oil price bonanza’.
AA stated South Africa is no longer enjoying the benefits of the oil crash with retail petrol prices currently standing at R11,94 per litre for 95 ULP and R11,76 per litre for 93 UPL and LRP petrol.
Wholesale prices for diesel are around R9.70 per litre, but retail prices vary between fuel retailers nationwide.
‘Had the exchange rate remained flat in 2015, South Africans would currently have been paying, on average, 45 cents a litre less at the pumps,’ said the association.
‘This deficit has widened by another 32 to 40 cents in the first two weeks of January 2016, turning what would have been a 24 cents-a-litre drop in petrol at the end of the month into a potential rise of up to 16 cents.’
An oil price benefit of around 90 cents a litre to the diesel price has instead been muted to around 58 cents a litre by the exchange rate, with illuminating paraffin showing a similar picture.
‘The exchange rate’s ongoing weakness might mean trouble for the fuel price if oil prices begin to tick up again,’ the AA said.
‘At the current Rand/US dollar exchange rate, a return to oil’s highs of 2013 and 2014 would result in the fuel price approaching R20 a litre, putting yet more pressure on South Africa’s already-strained economy.’
Their finding is based on unaudited mid-month data released by the Central Energy Fund.
