AFTER a series of massive fuel price hikes in recent months, motorists will enjoy some reprieve in July.
According to the Automobile Association (AA), lower international oil prices throughout June have paved the way for a ‘substantial’ fuel price drop in July – a reduction which could have been greater had it not been for the weakening rand.
Commenting on unaudited month-end fuel price data, the AA is expecting petrol to drop by 86c/litre, diesel by 68c and illuminating paraffin by 58c.
‘June was the weakest month for oil in the last quarter, with crude briefly slipping below $60 to the barrel at mid-month,’ said the AA.
‘However, renewed tensions in the Middle East and a downturn in USA oil inventories have put pressure on the commodity, which has ticked up over the past few days.’
Looking forward, the prime driver of fuel price movements for the third quarter of the year is likely to be the oil price.
The AA said current tensions between the USA and Iran could have severe 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.’
