Rand slump threatens fuel price - AA

The Automobile Association has cautioned that the recent rand slump could undo recent fuel price stability.

Picture: EWN.

CAPE TOWN - Substantial rand weakness could undo the recent fuel price stability based on the unaudited mid-month fuel price data released by the Central Energy Fund, says the Automobile Association (AA) in a statement released on Thursday.

On Wednesday, the rand slumped as rating agency Moody’s warned that the pace of fiscal consolidation in Africa’s most industrialised nation had slowed.

Image by: Central Energy Fund.

The rand was down more than 8% in the past week, after being rattled by turmoil on Turkish financial markets.

AA says until the crisis hit, the fuel price picture for August had been flat, with data predicting modest declines in all fuel types at month-end, thanks to reasonable stability in the rand and international oil prices.

A series of fuel price increases have rocked an already shaky economy since the begin of 2018.

The extent and duration of the recent currency weakness will be pivotal in South Africa's short-term fuel price outlook, AA added.

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Additional reporting by Reuters.