February brings fuel price drop
A PETROL price drop is expected at the pumps in February. This after ongoing declines in the price of oil since the second week of the year, said the Automobile Association (AA), which was commenting on unaudited month-end fuel price data released by the Central Energy Fund.
“Rising tensions between the USA and Iran in the opening days of 2020 sparked a sharp increase in international oil prices, but the commodity has rebounded quickly. In fact, the oil price has returned to a level we might have expected had the US-Iran flare-up not taken place at all,” said the AA.
While oil has dipped to its lowest level since the start of December, however, the AA noted that the Rand/US dollar exchange rate is steadily moving in the opposite direction. The Rand has softened from around R14.05 to the dollar on 1 January to its current average of R14.30.
“We have some concerns over this ongoing weakening in the absence of any overt Rand shocks. It is not a good sign of confidence in the SA economy,” said the AA.
Despite the Rand’s trend, all fuel types are set for a decrease at month end with 95 Octane petrol expected to drop by around 13 cents a litre while 93 Octane petrol and both grades of diesel should see a four cents decrease and illuminating paraffin three cents.
“We’re pleased fuel prices have managed to tread water at the start of a year, a year which is likely to again be extremely economically challenging,” concluded the AA.