Photo by: Reuters
Ongoing oil strength, with limited support from the exchange rate, has set the stage for further increases in the fuel price, the Automobile Association (AA) warned on Friday.
Commenting on unaudited mid-month data released by the Central Energy Fund, the AA said the data predicts a rise of up to 27 cents a litre for petrol and 61c/litre for diesel. Illuminating paraffin is also under pressure, with the data currently showing a 60c rise.
The AA warned that economic shocks which weaken the exchange rate could worsen the picture by month-end.
The association said the stronger rand/dollar exchange rate has not been enough to counter the rise in world oil prices, "giving a risk of substantial fuel price hikes at the beginning of July".
With the cold of winter having set in, people who use paraffin for heating and cooking are poised to experience a sharp jump in their energy costs, along with a rise in transport-related costs, the AA cautioned.
It advised South African motorists to reconsider their driving patterns and car sharing habits to economise, should the current run of fuel price hikes continue in the medium term.