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SA petrol to hit new record under Ramaphosa

by Staff reporter
03 Nov 2021 at 05:18hrs | Views
South Africa's fuel prices are set to rise to a record today, adding to inflationary pressures in an economy that imports almost all of its fuel.

The retail cost of 95-octane petrol will climb by almost 7 percent to a R19.54 a litre, the Central Energy Fund said in a statement on its website. Coastal petrol prices will rise to R18.82 a litre.

A year ago, petrol was almost R5 a litre cheaper.

The Gauteng price of diesel will increase to R17.20 a litre, and to R16.59 on the coast.

Petrol (both 93 and 95) will be hiked by R1.21 a litre, while the price of diesel (0.05 percent and 0.005percent sulphur) will rise by R1.48 a litre.

The wholesale price of illuminating paraffin will be hiked by R1.45 a litre

Higher average oil prices, a weaker rand and higher levies on petrol and diesel are behind the latest increase, the fourth in the past five months.

Fuel accounts for almost 5 percent of South Africa's inflation basket and higher costs relative to 2020, when oil prices plunged after the onset of coronavirus pandemic, have been driving price growth this year.

Annual inflation quickened to a four-month high of 5 percent in September.

The South African Reserve Bank prefers to anchor inflation expectations close to the 4.5 percent mid-point of its target range and its recent warnings of upside risks have caused a jump in traders' rate-hike bets. Forward-rate agreements starting in one month, used to speculate on borrowing costs, fully price in a quarter-point increase in the benchmark repurchase rate in November.

The implied policy rate path of the central bank's quarterly projection model, which the monetary policy committee uses as a guide, indicates a 25-basis point increase in the final quarter of 2021 and in every quarter of 2022 and 2023. -

Source - Bloomberg-Fin24.
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