The Automobile Association of South Africa (AA) on Friday said it was predicting a 91 cents a litre drop in the petrol price for July due largely to a “remarkable drop in the price of oil since the end of May”.
In a statement, the AA said it expected diesel to drop by 70 cents a litre and illuminating paraffin by 62 cents a litre after analysing the Central Energy Fund’s unaudited mid-month fuel price data.
“The story of the month is definitely oil,” the statement said.
“Crude laboured above $70 a barrel for large portions of April and May, as the tug-of-war continued between the OPEC countries, which favour ongoing output restrictions, and the USA, where production is steaming ahead.”
The weakening of the rand, caused by public spats among ruling party officials over the mandate of the SA Reserve Bank, would, however, see South Africans not reaping the full benefits of reduced oil prices, the AA said.
“If stability returns to the Rand and oil settles at its lower level, there might yet be more good news in the pipeline,” the AA said.
“A lot will rely on politicians exercising restraint in their public statements. We urge government to decide on its economic policy clearly and unambiguously in private, before articulating it in public where investors are watching.”
– African News Agency