Sliding international oil prices in spite of a weaker Rand has been cited as the biggest factor in the Automobile Association (AA) forecasting a noticeable drop in the price of fuel come 4 March.
Commenting on unaudited data released by the Central Energy Fund on Friday (14 February), the AA said the Rand’s weakening from R14.30 to R14.85 against the US Dollar, as well as the mentioned flatter oil price, points to a decrease of between 14 and 25 cents a litre for petrol, 55 cents a litre for diesel and 66 cents in the case of illuminating paraffin.
“In the case of illuminating paraffin, the landed price of the fuel dropped by over 90 cents in two weeks. Similar positive effects have been noted on the other main liquid fuels,” the AA said in a statement.
It however added that the Rand’s decrease versus greenback, “reflects underlying weak economic sentiment in South Africa, and we share the view of many commentators that further weakening is likely. If the Rand continues to slip, we might see some reversal of the trend”.