After a series of monthly decreases, mostly as a result of a drop in demand for oil due to the impact of the Coronavirus, motorists are set to fork out more at the pumps in the new year.
Commenting on the first unaudited report released by the Central Energy Fund on Tuesday (15 December), the Automobile Association (AA) said current data points to a 34 cents a litre increase in the price of petrol and a hefty 52 cents rise in the prices of diesel of illuminating paraffin.
“It’s been a good month for the Rand so far, with the local currency picking up around 15 cents against the US dollar, but the basic fuel price has shot up since the start of December, raising the spectre of quite substantial fuel price rises if there isn’t a pullback before month end,” the AA said.
Attributing the price uptake to stronger international oil demand on the back of the International Energy Agency’s optimism for the finding of a vaccine to combat Covid-19, the AA stated that, “although the IEA does not expect a significant impact before the second half of 2021, we would not be surprised if optimism over the vaccine has been behind recent oil strength. Further strength might be on the cards if the vaccination plan shows large-scale effectiveness”.