If the oil price continues recovering, the R4-a-litre saving motorists enjoyed between February and April could soon be erased. Picture: SUPPLIED
If the oil price continues recovering, the R4-a-litre saving motorists enjoyed between February and April could soon be erased. Picture: SUPPLIED

Motorists look set for fuel price hikes next month as the oil price continues recovering from its April crash, says the AA.

Based on current figures, petrol is set to climb to R1.59 a litre, diesel by R1.48, and illuminating paraffin R1.94 in the first week of July.

The basic fuel price used in SA has jumped 8% since June, with higher peaks, as international oil prices claw back some of the huge declines of the past four months, the AA says.

“With world demand expected to continue to increase, South Africans must likewise expect the fuel price to gradually edge back towards pre-Covid-19 levels.”

However, the association said that it will probably take months for oil to return to its previous trendline, giving motorists something of a breather.

“South Africans are also benefiting from increasing rand strength, with the local currency having made up 60c against the US dollar since the start of June, and briefly breaching the psychological R17 to the dollar mark. In fact, the rand’s firmer performance in June has offset the fuel price increases by about 36c a litre to date,” the AA notes.

The AA notes that the currency is far weaker than before, and continuing relative weakness would place SA fuel users at an increasing disadvantage as oil prices rise.

The AA warns that with fuel showing this sort of of increase in just the first two weeks of June, the increase could be much heftier at month-end. If this continues, it might not be long before the R4-a-litre saving motorists enjoyed between February and April is erased.

The rand is now trading about R3 higher to the dollar than before the Covid-19 crisis began.

A litre of 95 octane petrol (inland) rose from R12.22 to R13.40 last month, while the wholesale price of 50 ppm diesel went up from R11.19 to R11.40.