Consumers could feel the pinch of petrol hike
Economists say the consumer price index will increase due to the petrol price.
JOHANNESBURG - Economists says the petrol price hike on Wednesday will not only affect motorists but consumers at large.
Economist Thabi Leoka says the consumer price index (CPI) will increase due to the petrol price, caused by a weakening rand, and will only come back down in 2017.
The Department of Energy announced on Friday the price of 93 octane will cost 44 cents more per litre, while 95 octane will increase by 43 cents a litre.
Diesel will go up by 23 cents a litre and illuminating paraffin will increase by 30 cents a litre.
The department says average international product prices of petrol, diesel and illuminating paraffin increased during the period under review.
The rand appreciated against the US dollar during the period under review, on average, but still remained above the average of the previous period.
Leoka added that ongoing feuds between Finance Minister Pravin Gordhan and the Hawks also negatively affected the currency.
"So we may see an increase in the inflation forecast and that has been priced. If you look at the statement from the Reserve Bank, it does say the fuel prices will increase slightly and that will impact affect the CPI."