Motoring Reporter
2 minute read
29 May 2020
11:45 am

June petrol price increase expected, diesel rationing starts

Motoring Reporter

The Automobile Association has warned motorists to expect fuel prices to increase in the coming months as demand increases.

With the country moving to level 3 of the lockdown regulations next week, the Automobile Association (AA) has revised its fuel price outlook for June, and is predicting a higher than expected increase across all grades come 3 June.

Commenting on the final unaudited data report released by the Central Energy Fund on Friday, 29 May, the AA said it expects the price of petrol to rise to R1.18 a litre, while diesel, which was set to drop for a third consecutive month, will now rise by 22 cents a litre and illuminating paraffin by 41 cents.

“The global lockdowns under Covid-19 saw fuel demand plummet. The resulting oversupply left storage bunkers full, with the extraordinary outcome that oil prices in the USA briefly dipped below zero, ” the association said in a statement.

It however attributed the hefty rise to the recommencing of economic activity, saying that demand had fallen sharply as a result of the Coronavirus enforced lockdown that led to two months of record decreases at the pumps as travel became restricted.

However, the AA said that motorists could expect fuel prices to increase in the coming months: “We advise motorists to be pragmatic and anticipate fuel prices slowly returning to their previous levels over the medium to long term. It would be prudent to budget accordingly.”

In a statement this week, the South African Petroleum Industry Association said diesel is in short supply due to refineries’ inability to keep up with demand.

“Since the easing of lockdown restrictions and the transition from Alert Level 5 to Alert Level 4, the opening of the economy has resulted in a more rapid recovery than expected. There has been a dramatic increase in demand for diesel.

“Stock rationing is been implemented to manage demand and to preserve stock. Unplanned shutdowns were a contributing factor which led to this and the shortage. It is likely to continue until the end of May.”

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