Possible 17c to 18c petrol price increase in May

2016-04-27 06:00

A GRADUAL, but sustained strength in petroleum prices may result in a 17c to 18c per litre increase in the price of petrol next month, the Automobile Association (AA) said on Monday.

The AA, commenting on unaudited mid-month data released by the Central Energy Fund (CEF), said on Monday that on the international market, diesel and petrol prices have risen since late February.

The appreciation of the rand against the U.S. dollar had gone some way to offset this. This meant that local diesel and illuminating paraffin prices might decline at month end, while petrol was set to climb. Diesel and illuminating paraffin prices could drop 11c to 12c per litre.

“The exchange rate, and international oil prices, continue to be volatile, and the month-end picture could be quite different from the current one,” the AA said.

Tumbling world oil prices caused world markets to slip and the rand to weaken yesterday. By mid-morning the price of North Sea Brent oil had dropped more than four percent to $41,38 (R602) a barrel after major oil producers in the Middle East failed to agree over the weekend on a plan to curb the global oil supply glut.

The rand initially fell more than one percent to R14,75 to the dollar in line with the tumbling oil price, but recovered those losses to trade at R14,61 per dollar by mid-morning.

The JSE followed world markets lower, but the losses were moderate.


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