Although current data is predicting a drop in fuel prices in July, the Automobile Association (AA) has advised against premature celebrations.

“The good news is that preliminary data from the Central Energy Fund (CEF) for the middle of July is showing firm reductions in international petroleum prices,” the AA said on Wednesday.

Economists have yet to determine whether the Iranian nuclear deal, which will open the country’s oil to the world, will change the price in petrol. The AA did not want to comment on this.

“The exchange rate picture is less positive, with the rand having steadily depreciated against the dollar since the end of last month.”

After a period of stability towards the last week of June, the exchange rate has climbed from R12.20 to the dollar to almost R12.40 to the dollar. The drop in international petroleum prices has kept ahead of the exchange rate though.

According to the AA this means petrol is currently in line for a reduction of 28 cents a litre, with diesel and illuminating paraffin set for a decline of around 50c to 55c a litre.

However, the AA cautioned that a flattening of international petroleum prices or continued depreciation of the rand against the dollar could reverse this trend.

“The fuel price has shown increasing volatility in recent months, and we advise motorists to maintain a prudent stance towards their fuel expenditure,” the AA concluded.

The petrol price went up by more than 40c at the beginning of July -Fin24.

Source: News 24 Wire