The Automobile Association (AA) has blamed the slow oil price and Rand/Dollar vulnerability for the sharp increase in the price of petrol, diesel and paraffin.
Set to come into effect in the first week of February 2021, petrol is expected to rise by up to 82c a litre, diesel by 59c and illuminating paraffin by 60c.
"Unfortunately, our mid-month concerns over the advancing oil price have been borne out in practice. There has been a slow but steady rise in the price of oil which is likely to cause ongoing pain at the pumps. Almost all of the fuel price increases reflected by this month's data are attributable to the stronger oil price, and the average Rand/US dollar exchange rate has remained generally flat for the month, despite some large daily swings."
Despite the Rand dropping to an all-time low of over R19 to the dollar last April and the currency has since appreciating to approximately its pre-Covid -19 level, the changes in the oil price have offset this
"The record low exchange rate, fortunately, went hand-in-hand with record low oil prices, so the impact went largely unnoticed as fuel prices plunged. But economic or policy shocks which weigh on the Rand are likely to have a more significant effect on the fuel price now that international oil prices have rebounded," the Association concludes.This article was originally published on Cars.co.za.