Prices of fuel to drop next month, says AA

FUEL prices are set to drop next month after the rand’s recent strong performance against the US dollar‚ despite increases in international petroleum prices this month.

The good news came from the Automobile Association (AA) yesterday, based on unaudited monthend fuel data released by the Central Energy Fund.

“The rand has had a very strong run against the dollar since the middle of the month‚ gaining considerable ground after the ANC’s electoral conference chose Cyril Ramaphosa as the new leader of the party‚” the AA said.

“After opening the month at R13.80 to the US dollar‚ the rand is now testing the R12.30 level.”

The association said that despite higher international oil prices this month‚ all grades of fuel were set to fall with the Department of Energy’s next price adjustment.

“We expect petrol will be down by up to 34 cents a litre‚ diesel by 26 cents and illuminating paraffin by 28 cents a litre‚” the AA said.

“The rand – and‚ by extension‚ fuel prices – have proven vulnerable to political developments in South Africa over the past year.

“Ramaphosa’s political and fiscal position ahead of the February budget speech is likely to be the most influential determining factor for fuel price movements in the short term.”