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Fuel price higher as oil rallies

Ongoing increases in international petroleum prices will combine with a 30 cents-a-litre increase in the fuel levy to give a hefty fuel price hike for April. This is according to the Automobile Association (AA), which was commenting on unaudited month-end data released by the Central Energy Fund (CEF).

"Including the additional 30 cents a litre fuel levy, petrol is likely to see an increase of up to 83 cents a litre, with diesel up around 95 cents a litre," the AA commented.

"Although the Rand / US dollar exchange rate has firmed in the Rand's favour over the past few weeks, the strengthening of international petroleum product rises has outstripped the Rand's gains."

The Association said that the fuel price was subject to considerable risk.

"If oil prices continue to climb, South African motorists can expect substantial fuel price increases," it commented.

"Any associated deterioration in the exchange rate will add more pressure. A combination of sustained oil strength, and a ratings downgrade before year end, would be very negative for motorists," the AA concluded.

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