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Motorists are urged to brace themselves, come the start of September, with petrol prices expected to increase yet again.
Commenting on the unaudited mid-month fuel price data released by the Central Energy Fund, the Automobile Association (AA) says fuel price outlooks show modest changes in all fuel grades. “The current picture shows petrol increasing by around four cents a litre. On the upside, diesel is indicating a 16 cent decrease, with illuminating paraffin down by ten cents.”
The Association elaborates further on the matter by explaining that the Rand’s average exchange rate was virtually flat against the US dollar in the first two weeks of August 2021—moving less than three cents. “But the local currency is trending weaker, and this may weigh more heavily against the fuel price by month-end,” the AA notes.
The AA says the bulk of the fuel price change came from slight declines in international petroleum prices. “Oil fell throughout the first week in August, flattened out, and subsequently fell further. If this trend is maintained, there is a possibility of price decreases for all fuel grades by month end. This would bring some welcome relief after last month’s heavy increases.”
According to the AA, the Organization of Petroleum Exporting Countries (OPEC) cartel, which had limited oil production due to decreased demand during the pandemic, announced in July that it would increase output by 400 000 barrels a day from August until the previous restriction had been eliminated.
This should apparently improve oil price stability throughout August, but the AA says, “although it could be countered by COVID-19-related uncertainty as new variants of the disease affect economic activity worldwide.”
In local affairs, the AA commented that the SAPREF refinery, shut down under force majeure due to the recent unrest, had been slated for re-start on 21 July. The refinery had indicated this would take place around ten days to complete.
The Association concludes, “We, therefore, don’t anticipate fuel shortages related to either the refinery or bulk transport of fuel by road – indications are that the N3 corridor between KwaZulu-Natal and Gauteng is stable and has not experienced significant disruptions since it was re-opened, which is encouraging.”
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