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Stronger rand, oil spoil petrol price party

Sep 29 2016 20:10
Carin Smith

Cape Town - Petrol is expected to increase by between 43 cents to 45c a litre, diesel by 23c and illuminating paraffin by 22c at the end of September, the Automobile Association (AA) said on Thursday.

Stronger international petroleum prices have contributed the bulk of the fuel price increase expected at the end of September, according to the AA.

"The rand declined early in September against the dollar, but has since strengthened," the AA said, commenting on unaudited month-end data released by the Central Energy Fund (CEF).
 
"Only around eight cents of this month's increase will come from rand weakness. It is oil strength which has been the major contributor."

In the view of the AA, only time will tell how stable the rand/dollar exchange rate is likely to be. It added that it "noted with interest" the agreement reached by members of the Organisation of the Petroleum Exporting Countries (Opec) to limit oil production - the first such cut since 2008.

READ: Further drop in petrol price

The AA said the decision by Opec to trim output by up to 700 000 barrels per day could - if accepted at the group's November meeting - have the effect of stimulating international petroleum prices, but may also lead to increased production by non-Opec members.

"If the rand remains volatile, South Africans will be more exposed to changes in the oil price, and we advise motorists to continue to economise in the absence of a clear picture of what effect the Opec decision may have," cautioned the AA.

Early in September the pump price for a litre of petrol became 18c cheaper for all grades, leading motorists to pay R12.17/l for unleaded petrol inland and R11.69/l on the coast. The price of diesel 0.05% sulphur and diesel 0.005% dropped by 48c and 49c per litre respectively, while illuminating paraffin (wholesale) became 47c/l cheaper and illuminating paraffin (SMNRP) 63c/l cheaper.

In late afternoon trade on Thursday, the rand was trading at R13.84/$ and Brent crude at $49.90 a barrel.

ALSO READ:Gordhan jitters, oil strength slam brakes on fuel price drop

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automobile association  |  oil  |  petrol price  |  rand  |  sa economy
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