International oil prices have retreated in virtual lockstep with a strengthening Rand, complicating attempts to forecast a month-end fuel price
After a sharp rise from the end of March, international petroleum prices have given up almost all their gains in the past two weeks. Over the same period, the Rand has unexpectedly firmed to near its pre-cabinet reshuffle levels.
As matters currently stand, petrol is slated for a rise of 49 cents a litre at month end, with diesel up 33 cents, and illuminating paraffin 35 cents.
Earlier this month the we predicted petrol would increase by 55 cents a litre, diesel by around 39 cents, and illuminating paraffin by 41 cents. These forecasts were based on current data at the time such as the Rand / US dollar exchange rate, which moved from around R13.40 mid-month to its current value of around R13.10. International oil prices have also firmed to the current position of just under $50 USD from mid-month rates of around $53 USD.
We anticipated oil would be volatile in 2017, but we believe the Rand's strength flatters to deceive. The effects of various factors over longer timescales are what will ultimately determine the level of the Rand and, by implication, what motorists will pay for fuel in the coming months," the AA concluded.