Weak rand major contributor to August fuel price hike

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The Automobile Association of South Africa confirmed its mid-month prediction this week, when it announced that the petrol price would increase by 20 cents at the end of July.

As it explained earlier this month, the poor performance of the rand has contributed significantly to that fuel price hike. On Friday, the rand was trading at 13 to the USD, continuing with its downward trajectory during the second half of the year.

While the exchange rate was not the only contributing factor, it certainly played the biggest role.

“The Rand accounted for about two-thirds of the hike, with a slight uptick in international fuel prices contributing the remainder,” said the AA.

Diesel is predicted to go up by nearly 31 cents, with illuminating paraffin showing a 27 cent hike. The AA does not think the bad news will end here though.

“While the rand continues its volatile trend, international fuel prices have surged strongly in the past ten days. If this upwards movement continues into August, fuel users can expect further bad news,” added AA.

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