S.Africa’s petrol price cuts may be reversed - CNBC Africa

S.Africa’s petrol price cuts may be reversed

Southern Africa

by admin 0

Fuel price reductions which took place in May 2014 may be set for a reversal. PHOTO: Getty Images

This is according to the Automobile Association (AA) of South Africa which stated that the latest fuel price data released by the Central Energy Fund was not looking positive.

(WATCH VIDEO: South Africa petrol price to increase)

 “A gradual rise in the average Rand/US dollar exchange rate since the end of May has put pressure on the fuel price.  In addition, international petroleum prices, which dropped during the first ten days of June, have given up these gains and returned to their May levels,” explained the AA. 

The company predicted that there will be an increase of 13.5 cents per litre for petrol and seven cents for illuminating paraffin. The diesel price however may remain unchanged.

Factors that are affecting the fuel costs include issues such as the political instability in Iraq which have impacted international petroleum prices, as well as the negative rating on South Africa’s exchange rate by global ratings agencies Standard & Poor and Fitch.

(WATCH VIDEO: Which way for South Africa's ratings?)

“At best, we are hoping for stability in these areas to reduce the risk of further steep fuel price hikes,” said the AA.