Despite recent Rand weakness, the fuel outlook for June remains positive with significant reductions in all fuels likely in June.
Commenting on unaudited mid-month data from the Central Energy Fund (CEF), the Automobile Association (AA) says lower international product prices are the reason behind the predicted decreases.
“The weaker Rand/IUS Dollar exchange rate, though, is taking away from the forecast decreases which would have been more significant had the Rand been stronger. As it stands, both grades of petrol are heading for decreases of around R1/l, while the decreases to diesel are currently standing at around R1.30/l. Importantly, the data is showing that illuminating paraffin, which is such an important fuel at this time of the year, is headed for a decrease of around 80c,” notes the AA.
The Association says any decreases to fuel prices now are welcome and will certainly bring relief to cash-strapped consumers which, if realised, will bring prices down to rates last seen in February.
“These decreases are positive and will ease pressure on our economy and on consumers. Of course, this is only one indicator, and we cannot ignore higher interest rates and food prices but a decrease to fuel costs will make a difference to many,” the AA says.
The Association notes that the outlook for June is made mid-month and will change before the official adjustment for June is made.
“Nonetheless, we remain confident that significant decreases will be seen to fuel prices for June,” the Association concludes.