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The Automobile Association of South Africa is predicting a “hefty” increase in the price of petrol in June.
Commenting on unaudited month-end fuel price data released by the Central Energy Fund, the AA said the price of petrol is expected to rise by R1.18 a litre and with increases of around 22 cents for diesel and 41 cents for illuminating paraffin.
"The global lockdowns under COVID-19 saw fuel demand plummet. The resulting oversupply left storage bunkers full, with the extraordinary outcome that oil prices in the USA briefly dipped below zero," the AA said.
The Association notes that crude oil prices used to calculate South Africa's fuel prices had fallen in lockstep with the reduction in demand but were now inching up as economic activity begins to ramp up on a global scale.
"This is not unexpected, and South Africans should remember that the fuel price is currently around four Rand per litre lower than it was before the COVID-19 crisis hit," the Association noted.
It also advised that despite moderate price rise for diesel, motorists may encounter shortages in the short term.
The Association said that according to the South African Petroleum Industry Association (SAPIA), the economy has recovered more rapidly than expected, leading to a dramatic increase in the demand for diesel which refineries are currently not able to meet."
However, SAPIA expected diesel supply to normalise once both refineries in Durban reach on-spec production, which is anticipated to be at the end of May.
