Motorists can expect a petrol price plummet at the pumps as November brings a drop in international oil prices, but it’s all in the pipelines with the temperamental Rand strength.
International oil prices have been dropping since November began, despite the solid fixed price of October. This is according to the Automobile Association (AA), which was commenting on unaudited mid-month fuel price data released by the Central Energy Fund (CEF).
Petrol is set to drop by 45 cents a litre, while diesel should be down by 38 cents and illuminating paraffin is set to enjoy a 40 cent reduction. The Rand’s strength firming up against the US Dollar added to the favorable predictions, however, the AA warned that the Rand had weakened sharply against the Dollar in the wake of the US election results. The petrol price could be a different picture at the end of the month if Rand strength stays down. “In addition to short-term fluctuations, the Rand remains exposed to a possible ratings downgrade in South Africa,” said the AA.
Once again petrol becomes a political game as the knock on effect continues from parliament to the pump. “The currency is now also vulnerable to possible shifts in US policy when president, Donald Trump, takes office early in 2017,” said the AA. The rise and fall of the petrol price is likely to continue going forward . “While the expected reduction at the pumps ahead of the 2016 Christmas season is welcome, South Africans would be prudent not to expect sustained drops in the fuel price over the next few months,” said the AA.