South African truckers and motorists are in for some fuel price relief in June. This is according to the Automobile Association (AA), commenting on unaudited month-end fuel price data released by the Central Energy Fund (CEF).
“Our expectation for June is that diesel will drop by 20 cents a litre while petrol will drop by up to 26 cents a litre. Illuminating paraffin will also drop by 20 cents a litre,” the AA says.
The Association notes that the Rand advanced against the US dollar during most of May, with further support from retreating international petroleum prices. “Both of these factors have contributed to the reduction in the fuel price.”
The AA adds that OPEC’s decision to continue its production cut for another nine months shows that there is concern in oil producing nations about a continued world oversupply of oil. This could mean a period of relative price stability. On the home front, the Association says the background political noise affecting the Rand continues to play a role.
“With political uncertainty set to continue, our medium-term outlook for the fuel price is that lower international petroleum prices will be key to maintaining local fuel price stability if the Rand weakens again,” the Association said.