Energy Department has announced that the increase in petrol prices increase is mainly due to the sharp rise in global oil prices and a weakening rand.is expected to hit the second highest increase level on record when it rises by 54 cents per litre on Wednesday.
The Energy Department has announced that the increase is mainly due to the sharp rise in global oil prices and a weakening rand. Analysts say while the rising petrol price is not expected to result in higher inflation and interest rates in the short-term, it will erode the consumer’s disposable income.
An economist at Econometrix, Laura Campbell explains, “Although you’re not seeing the fuel inflation rising sharply because fuel prices were rising this time last year, undoubtedly there will be an effect on the consumer; in that their disposable income will be eroded somewhat by the higher fuel prices. So if you take into account that the effects on inflation need not be dramatic, we continue to expect that interest rates will remain unchanged,” says Campbell.
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