CAPE CITY – The South African Automotive Association (AA) said on Friday it expected 91 cents to decline in gasoline prices for July because it was largely due to "an extraordinary decline in oil prices since late May".
In a statement, AA said it expects diesel to drop 70 cents per liter and illuminate paraffin by 62 cents per liter after analyzing unaudited Central Energy Fund mid-month fuel price data.
"This month's story must be oil," the statement said.
"Crude oil works above $ 70 per barrel for most of April and May, due to tugging between OPEC countries, which supports restrictions on ongoing production, and the United States, where production continues to move forward."
The weakening of the rand, caused by a public dispute among ruling party officials over the Reserve Bank's mandate, will, however, see South Africa not reaping the full benefits of falling oil prices, AA said.
"If stability returns to Rand and oil settles at lower levels, there may be more good news in the pipeline," AA said.
"Many will depend on politicians who carry out restraints in their public statements. We urge the government to decide its economic policies clearly and unambiguously in private, before articulating it publicly where investors are watching."