Significant fuel price increase in January, warns AA
The Automobile Association (AA) says the fuel prices are set for a hefty rise at the beginning of the new year.
The association’s Layton Beard was commenting on unaudited mid-month fuel price data released by the Central Energy Fund.
"It's been a good month for the rand so far, with the local currency picking up around 15 cents against the US dollar, but the basic oil price has shot up since the start of December, raising the spectre of quite substantial fuel price rises if there isn't a pullback before month end," says Beard.
Beard says diesel and illuminating paraffin are the worst hit, with the current data showing an increase of 52 cents a litre for these fuel types.
“But petrol hasn't escaped unscathed, with increases of up to 34 cents a litre on the cards. The increases come despite significant global refining overcapacity, and a slight increase in the world-wide oil supply alongside falling demand.”
He says an effective vaccine for Covid-19 may accelerate the economic recovery from the pandemic.
"Although the IEA does not expect a significant impact before the second half of 2021, we would not be surprised if optimism over the vaccine has been behind recent oil strength. Further strength might be on the cards if the vaccination plan shows large-scale effectiveness.”
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