Last month's fuel price reductions may be set for a reversal.This is according to the Automobile Association which said that the latest unaudited fuel price data issued by the Central Energy Fund was not encouraging. “A gradual rise in the average Rand / US dollar exchange rate since the end of May has put pressure on the fuel price. In addition, international petroleum prices, which dropped during the first ten days of June, have given up these gains and returned to their May levels,” explains the AA.
The data for mid-June showed the diesel price virtually unchanged, but predicted an increase of 13.5 cents per litre for petrol and around seven cents per litre for illuminating paraffin. It is difficult to predict how the situation may change by month-end, citing factors such as the influence of on-going political instability in Iraq on international petroleum prices, as well as the effect of the recent ratings announcements by ratings agencies Standard & Poor's and Fitch on the exchange rate. “At best, we are hoping for stability in these areas to reduce the risk of further steep fuel price hikes,” concluded the AA.