BUSINESS NEWS - The Automobile Association (AA) has revised its fuel price outlook for August by predicting a substantially lower than initially expected uptake on 5 August.
Commentating on the final unaudited data report by the Central Energy Fund on Wednesday (29 July), the AA said it expects petrol to drop by between nine and 16 cents a litre compared to 35 cents, diesel by 48 cents a litre versus the originally predicted 68 cents, and illuminating paraffin by 43 cents a litre as opposed to the earlier reported 63 cents.
Attributing the lower increase to a stable international oil price, the AA remarked that the valuation of the Rand had played the biggest part though as any downturn compared to the price of Brent crude, would have resulted in a significantly steeper uptick.
“The Rand gained eight cents against the US dollar during July and the average exchange rate has firmed to below R16.90. With so much negative news surrounding the economy, the Rand’s firmer trend is welcome, but we would like to see the government support this trend in the area of economic policy certainty,” the AA said.
“Oil traded in a fairly tight range throughout July, but it was a substantial climb at the beginning of the month, plus some recent volatility, that combined to push prices higher With the level of global economic turmoil that currently prevails, predicting a ‘normal’ band for oil is near-impossible; we advise motorists to be pragmatic about the possibility of further increases, and to plan their budgets accordingly”.