DROP IN FUEL PRICE COULD BE ON THE WAY, SAYS AA

FUEL PRICE reductions might be on the horizon for South Africans at month-end, according to the Automobile Association (AA), which was commenting on unaudited mid-month fuel price data released by the Central Energy Fund. The AA cited the rand’s recent rally against the US dollar. On Monday the domestic unit strengthened against the US dollar, as concerns over the rising number of Covid-19 cases in the US put pressure on the greenback. “The rand has put on a remarkable rally against the US dollar in recent weeks, with the daily exchange rate strengthening from R17.30 on August 21 to R16.70 on August 31 and since the start of September, the rand has traded in a commendably tight range by recent standards,” said the AA. The domestic unit started the day at a steady R16.62 to the dollar, R19.75 to the euro and R21.35 to the pound. Oil producers have lowered their demand forecasts for the year, and the oil price remains stuck below the $40 (R667) level. West Texas Intermediate was quoted at $37.26 and Brent crude at $39.58 yesterday morning, according to TreasuryONE’s Market Data Report. “This all adds up to a promising picture for fuel users, with the data currently showing petrol lower by between 26 cents and 36c a litre, but diesel down by a whopping 88 cents, with illuminating paraffin also showing a healthy 83-cent drop,” said the AA. The AA, however, cautioned that oil prices would likely continue to see-saw.

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