Another fuel price hike expected in July, warns AA
The Automobile Association (AA) has predicted another substantial fuel price increase in July, a month after some 8 million South Africans started to return to work under level 3 of the national lockdown.
The association's Layton Beard says petrol could increase by as much as R1.59 a litre, and diesel by R1.48 a litre.
"The main driver behind this is that oil is continuing its march back towards its previous levels in the first half of June."
"Any gains that we have made because of a reduction in world economic activity that led to a reduction in the oil price, are being wiped out by a return to that economic activity and demand for oil, which is increasing.
"Therefore, the price of oil is going up as well."
The AA expects the price of illuminating paraffin to rise by R1.94.
Beard says the Rand/Dollar exchange rate remains a concern.
"If the exchange rate weakens any further, then these predicted increases could drastically change before the end of June".
READ ALSO:
Significant fuel price increase in June, warns AA
The association's Layton Beard says the rise in the price of brent crude oil is the major reason for the sharp increase. "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."