Weak oil offsets Rand plunge to save SA motorists pain at pumps in December
South African motorists are set to feel the first direct impacts of the unexpected removal of Finance Minister Nhlanhla Nene and the resulting exchange rate chaos. This is according to the Automobile Association (AA), which was commenting on unaudited fuel price data released by the Central Energy Fund (CEF).
Petrol is largely unchanged, with diesel due for a substantial drop of up to 50 cents a litre, while illuminating paraffin is down by 43 cents. The AA said that without the current Rand weakness, these drops would have been up to 20 cents higher.
“Although the Rand has recovered some of its losses, the current flattering fuel price picture is solely due to continued weak oil prices. We can therefore be grateful that oil prices remain weak, and that the Rand recovered some ground following the re-appointment of Pravin Gordhan as Finance Minister on Sunday,” the Association commented.
“However, we are cautious of pinning our hopes on further drops in the oil price, especially since the month still has 15 days to run. We don’t think the Rand’s recent weakness has yet been fully reflected in the fuel price, and if oil prices tick up, the results could make for a very bleak new year for South African motorists and commuters,” the AA commented.
“We advise motorists to moderate their expectations of a fuel price drop in January.”
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