Cheer at the pumps as AA predicts substantial October fuel price drop

Motorists are set to breathe a little easier at the pumps in October with an expected decrease projected across all fuel types come 7 October.

Commenting on unaudited data released by the Central Energy Fund on Tuesday (15 September), the Automobile Association (AA) said it expects the price of petrol to drop by between 26 cents and 36 cents a litre, while diesel and illuminating paraffin are poised for more substantial drops of 88 cents and 83 cent respectively.

"The Rand has put on a remarkable rally against the US dollar in recent weeks, with the daily exchange rate strengthening from R17.30 on August 21 to R16.70 on August 31 and since the start of September, the Rand has traded in a commendably tight range by recent standards," the association said.

It however cautioned that the balance could swing the other way based on the recovery of oil after the various Covid-19 lockdowns, and looming Northern Hemisphere winter where demand on petrol and diesel will be at a premium.

"The seismic shock that Covid-19 has dealt to the world's economy, along with high stock levels, might mean the increased winter demand for heating fuels may not be enough to translate into substantial diesel price increases. A period of further oil price and Rand stability would give a much-needed breather to South African fuel users".

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