While rand got value the first week of July against US dollar, international oil prices have increased.
It is according to Automobile Association (AA), which commented on unaudited monthly fuel price data, which was released by the Central Energy Fund.
“Rand has appreciated offset against the US dollar, dipping below R14/$ mark. However, international oil prices pulled back in the first week of July. They have race upwards again considering international inventories and ongoing political instability in the Middle East. The increased cost of fuel was higher for petro than for diesel. It ended up with the unusual situation where diesel users are set for price decrease while petrol users’ price gets increased. Data shows that a 7c/litre increase is for petrol, diesel decrease with 20c/litre. Paraffin will be cheaper with 14c/litre,” AA stated.
In addition, there has been volatility in both exchange rate and rand over June. AA said month fuel picture is a good indicator of what is likely to take place at the end of the month.
“The current economic drivers of both the exchange rate oil prices are highly fluid. We think the current figures indicating at this stage and pragmatism, suggest the picture towards month end will be substantial and different from current outlook,” said the Association.
