Weak rand bad for fuel prices

Motorists have been warned to tighten their belts as the rand’s weak performance could spell bad news for fuel prices.

An Automobile Association (AA) statement yesterday said that although monthly data suggested a fall in the petrol price of about two cents, the fuel price may not remain stable for long.

Diesel and paraffin were also expected to drop four cents and eight cents respectively.

“The extent and duration of the recent currency weakness will be pivotal in South Africa’s shortterm fuel price outlook,” the organisation said.

Motorists should not count on the moderate trend of the past six weeks continuing and should economise wherever possible.

“Almost two months of modestly improving rand strength ended in a dramatic reversal as the local currency was caught up in the emerging market chaos triggered by Turkey’s economic difficulties,” the AA added.

“Until the crisis hit, the fuel price picture for August had been flat, with data predicting modest declines in all fuel types at monthend, thanks to reasonable stability in the rand and international oil prices.”

These factors had tipped petrol towards a likely increase at month-end, the Automobile Association (AA) said, and substantially offset the gains made by diesel and paraffin.

AA spokesperson Layton Beard said although an increase could be expected, consumers would have to wait till the end of the month for a more precise prediction of the expected fuel price hike.