According to the AA, the stronger rand is currently being countered by a sharp spike in international oil prices.
YOUR December road trip could end up costing a little less than expected, if current fuel price trends persist until the end of this month.
Commenting on unaudited mid-month data from the Central Energy Fund, the Automobile Association said that petrol prices could drop by up to 36 cents a litre in December, while diesel is looking set for a far smaller decrease to the tune of four cents a litre.
However, a lot can still change between now and the end of the month, and if current trends persist we could see a smaller petrol price cut and perhaps even a slight increase for diesel as that equation has turned negative in recent days.
According to the AA, the stronger rand is currently being countered by a sharp spike in international oil prices, with the international price of diesel shooting up by almost 20 percent between November 2 and 11, and petrol up by over 15 percent.
“It is quite unusual to have such a spread of price outlooks as is currently the case,” the association said.
The AA added that the current oil price and currency fluctuations are due to world consumption rebounding faster than production as well as all the “background noise” surrounding the election of Joe Biden as US president.
Furthermore, the recent progress made in the development of a Covid-19 vaccine is being countered by fears over the so-called second wave in Europe and the resulting lockdowns.
“Under the circumstances, oil prices and the rand/USD exchange rate remain as stable as can be expected,” the AA said.
A litre of 95 Unleaded petrol currently costs R13.89 at the coast, which is still somewhat cheaper than it was in January (R15.52). However, 2020 has been a roller-coaster of a year for fuel prices, with ULP 95 dipping to as low as R11.52 at the height of lockdown in May, before shooting up to R14.42 just two months later as international oil prices rebounded.