Petrol up, diesel down, as oil retreats

Petrol up, diesel down, as oil retreats

Fuel price outlooks are showing modest changes in all grades of fuel. This is according to the Automobile Association (AA) which was commenting on unaudited mid-month fuel price data released by the Central Energy Fund.

"The current picture shows petrol increasing by around four cents a litre. On the upside, diesel is indicating a 16 cent decrease, with illuminating paraffin down by ten cents," the AA says.

"The Rand's average exchange rate was virtually flat against the US dollar in the first two weeks of August – it has moved less than three cents. But the local currency is trending weaker, and this may weigh more heavily against the fuel price by month-end," the AA notes.

The Association says the bulk of the fuel price change came from slight declines in international petroleum prices.

"Oil fell throughout the first week in August, flattened out, and subsequently fell further. If this trend is maintained, there is a possibility of price decreases for all fuel grades by month end. This would bring some welcome relief after last month's heavy increases."

The Organization of Petroleum Exporting Countries (OPEC) cartel, which had limited oil production due to decreased demand during the pandemic, announced in July that it would increase output by 400 000 barrels a day from August until the previous restriction had been eliminated.

"This should improve oil price stability throughout August," the AA says, "although it could be countered by COVID-19-related uncertainty as new variants of the disease affect economic activity worldwide."

In local affairs, the AA commented that the SAPREF refinery which was shut down under force majeure due to the recent unrest had been slated for re-start on 21 July, and that the refinery had indicated this would take around ten days to complete.

"We therefore don't anticipate fuel shortages related to either the refinery or bulk transport of fuel by road – indications are that the N3 corridor between KwaZulu-Natal and Gauteng is stable and has not experienced significant disruptions since it was re-opened, which is encouraging," the Association concludes.



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