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Cheer at the pumps as oil price softens - AA

Oil prices in downward trend, exchange rate key factor

Encouraging mid-month fuel price data has been buoyed by receding international petroleum prices, meaning good news for motorists in August. This is according to the Automobile Association, which was commenting on unaudited data released by the Central Energy Fund (CEF) this week.

"The oil price has shown a gradual downward trend, and has continued to decline since our mid-July review of the fuel price picture," the AA said. "And despite some Rand weakness against the US dollar in the last few days, the South African currency unit has traded in a fairly tight band around R12.40 to the dollar since mid-month," the Association added. "The result is that most of the benefit of lower international product prices will be passed on to the motorist."

The AA said current data indicated that the petrol price would be lower by between 47 to 49 cents a litre, with diesel down by approximately 70 cents. Illuminating paraffin was also set for a drop of around 68 cents a litre.

"The recent downward trend in international petroleum prices would require a substantial reversal to heavily impact South African fuel prices," the AA commented. "The short- to medium-term outlook for the fuel price is therefore likely to depend largely on the exchange rate, the Association concluded.

Contact AASA Public Affairs
Telephone 011 799 1126
E-mail press@aasa.co.za

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