South Africans face another fuel price increase as well as interest rate hike

There seems to be no reprieve for South African wallets as another hefty fuel increase is predicted for next week, as well as economists anticipating further interest hikes.

The Organisation Undoing Tax Abuse (Outa) said on Monday it predicts that motorists could be paying R1.75 more for fuel from July 6.

Citizens could soon be sounding the alarm bells, as the South African Reserve Bank, will also be looking to curb the spiking inflation in the country by raising interest rates once again at its next Monetary Policy Committee meeting.

The Reserve Bank has been on a trend of raising the interest rate since the start of the year, as the country recovers from the Covid-19 pandemic.

Adding to the pain felt to the wallets of many, the continuing crisis in Ukraine affects wheat and cooking oil prices, driving up the price of many food items.

In an effort to provide some form of relief, Outa has urged the government to extend the R1.50 general fuel levy.

"We really do need to see longer-term solutions, but for now, the short-term solution is the only space government can provide some reprieve, and that is in the fuel levy," Outa CEO Wayne Duvenage said.

"Outa believes it would be prudent for the minister of finance to consider extending the fuel levy reprieve of R1.50 per litre."

Minister of Finance Enoch Godongwana extended the general fuel levy relief on May 31 this year, saying it would be R1.50 until July 6, then drop to R0.75 until August 2.

"Petrol is extremely expensive now. It is impacting on inflation. It is impacting on commuter pricing. So instead of dropping it to R0.75 for another month, keep that R1.50 reprieve in place," Duvenage added.