South Africa’s government said on Monday that the regulated petrol pump price would rise by as much as 12% this week and the wholesale diesel price by 10%, reflecting the impact of the Iran war on global energy prices.
South Africa imports most of its fuel and adjusts domestic prices every month using a formula that factors in crude oil prices and the rand exchange rate, among other things. Below are more details:
- The petrol price will rise by up to 3.33 rand ($0.2003) a litre from October 7, while the wholesale diesel price will rise by up to 3.24 rand a litre
- Higher fuel prices are expected to drive overall inflation further above the central bank’s 3% target (ZACPIY=ECI), opens new tab, potentially prompting more interest-rate hikes.
- Inflation was at 4.4% year-on-year in August
- The bank has already hiked its policy rate (ZAREPO=ECI), opens new tabtwice since the Iran war started and it has one more rate announcement this year, scheduled for mid-November
($1 = 16.6292 rand)
AP
