Share

Fuel price set to rise as economy gears up for Level 3 - AA

accreditation

The fall in the petrol price of recent months is set to come to an end in June, according to the latest projections released by the Automobile Association on Friday.

The Association said in a statement that petrol is expected to increase by up to R1.18 a litre. The association also expects an increase of 22 cents for diesel and 41 cents for illuminating paraffin.

Remarking on unaudited month-end fuel price data released by the Central Energy Fund, the AA noted a stronger than expected economic recovery for South Africa as the main reason for their projection and warned that there could be a shortage of diesel as demand from industries starting up again after the Level 4 lowdown shifts to level 3 next week.

The lockdowns around the world, aimed at curbing the spread of the Covid-19 novel coronavirus caused economies to halt, when had an adverse effect on the demand for oil, as reflected in a historical oil price crash in late April.

"The global lockdowns under Covid-19 saw fuel demand plummet. The resulting oversupply left storage bunkers full, with the extraordinary outcome that oil prices in the USA briefly dipped below zero," the AA statement said.

At the end of April all grades of petrol fell by R1.74 per litre from midnight from the beginning of May, while diesel declined by between R1.56 and R1.61 per litre.

The AA statement released on Friday warned that despite the moderate price rise for diesel, motorists are likely to encounter shortages of diesel in the short term.

In the same statement, the South African Petroleum Industry Association noted a faster recovery than expected, leading to a dramatic increase in the demand for diesel which refineries are currently not able to meet.

The AA said motorists should anticipate fuel prices slowly returning to their previous levels over the medium to long term and budget accordingly.

Compiled by Khulekani Magubane

We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
18.98
-0.2%
Rand - Pound
24.14
-0.1%
Rand - Euro
20.63
-0.2%
Rand - Aus dollar
12.39
+0.2%
Rand - Yen
0.13
+0.3%
Platinum
911.84
-1.3%
Palladium
1,018.92
-4.4%
Gold
2,160.36
0.0%
Silver
25.11
+0.3%
Brent Crude
86.89
+1.8%
Top 40
66,252
0.0%
All Share
72,431
0.0%
Resource 10
53,317
0.0%
Industrial 25
100,473
0.0%
Financial 15
16,622
0.0%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders