Fuel price cuts in the pipeline as rand rallies, oil slips

JOHANNESBURG – Fuel price reductions may be on the horizon for South Africans at month end, according to the Automobile Association (AA), which was commenting on unaudited mid-month fuel price data released by the Central Energy Fund (CEF).

The AA cited the rand’s recent rally against the US dollar. On Monday the domestic unit strengthened against the US dollar, as concerns over the rising number of Covid-19 cases in the US put pressure on the greenback.

“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,” says the AA.

The domestic unit started the day at a steady R16.62 a dollar, R19.75 to the euro and R21.35 to the pound.

Bianca Botes, executive director at Peregrine Treasury Solutions said more sideways trading could be expected from the rand as the market awaits the three big central bank events this week, with the market dynamic little changed.