Fuel price vulnerable to exchange rate movements
19 November 2013:
The AA’s prediction on the petrol price change in December
The Automobile Association of South Africa (AA) cautions South Africans that a reversal in the recent exchange rate trend may translate to higher pump prices at the end of November.
International petroleum prices declined in the first half of November, which would normally be good news for motorists. Unfortunately, the average exchange rate weakened by more than 20 cents against the US dollar over the same period, negating the lower oil price.
At this stage, the first half of November showed negligible under-recoveries on diesel and illuminating paraffin, with a small over-recovery on petrol. However, the amounts in question are around two cents per litre either way, and the fuel price is looking vulnerable.
Unless international petroleum prices remain in decline, further weakening of the exchange rate will make itself felt at the pumps next month.