PODCAST | Record high petrol prices and SA’s economy

The latest fuel price hikes are the focus of this edition of the Business Day Spotlight.

Our host Mudiwa Gavaza is joined by Koketso Mano, an economist at FNB.

Consumers are under more pressure as fuel prices are now two-thirds higher than they were during the hardest part of the Covid-19 lockdown last year, after the department of mineral resources & energy released the fuel-hike adjustments on Monday.

Mano says the hikes are primarily driven by higher international oil prices and a weaker rand.

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The retail inland price of both 93- and 95-octane petrol went up R1.21/l to a record R19.50/l from midnight on Tuesday. The price of diesel rose R1.48/l while the wholesale price of illuminating paraffin rose R1.45/l.

Mano highlights the risk of inflation carried by the price increases, as fuel is a direct input cost for the movement of goods and services in the economy. Major hikes will likely have a knock-on effect on the general price of goods over time.

Some analysts predict petrol could breach the R20/l mark.

Topics of discussion include: details of the latest fuel price hike in SA; reasons for the increased prices; increasing pressure for SA consumers; the risk of inflation due to increased transport costs; inflation in other parts of the world; how central banks can manage inflationary risk; and other factors holding back SA’s economic recovery.

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• Business Day Spotlight is a MultimediaLIVE production.