mobile menu mobile search

Petrol price, rate hike double blow for SA consumers

Petrol price, rate hike double blow for SA consumers

South African consumers are bracing for a double blow in April with the petrol price expected to rise sharply, while a 25 basis-point hike in interest rates also comes into effect.

Worse still, Eskom has been given the green light to raise electricity tariffs by 9.4% in April.

Inflation hit 7% year-on-year in February from 6.2% in January, data from Statistics South Africa showed on Wednesday, the highest rate since May 2009.

“Today’s surprisingly high inflation figure will probably lead the South African Reserve Bank to accelerate its programme of rate hikes,” Capital Economics’ Africa analyst John Ashbourne told Reuters.

“This will be very painful for an economy that is struggling to avoid recession.”

The Reserve Bank raised its repo rate by 25 basis points to 7% last week, following a 50 basis points hike in January.

“This kind of inflation can certainly give some vindication to the SARB’s prior decisions to hike interest rates and also gives them some justification to follow through with further consecutive hikes. Our official view remains for a further 25 basis points at each of the next two meetings,” Mohammed Nalla, head of strategic research at Nedbank Group told Bloomberg.

Also on Wednesday, the Institute of Race Relations (IRR) warned motorists to prepare for a petrol price increase of between 70c/l and 80c/l in April.

IRR chief economist Ian Cruickshanks warned that if the rand and oil prices remain at their current levels, the fuel price could increase by 41c/l in April. That would be in addition to the 30c/l increase in the fuel levy that also takes effect in April.

“(This) could see motorists paying between 70c/l and 80c/l more for fuel,” he said.

More on economics in SA

Eskom to raise electricity prices by nearly 10%

SA gets another interest rate hike

Three more interest rate hikes coming in 2016: analyst

BusinessTech's Staff Writer is directly plugged into the South African Internet backbone, and spits out press releases and other news as they receive it. They are believed to be cl...
Join the Conversation
  • Defcon_One

    Cue the inevitable ‘tighten your belts’ comments. If I tighten my belt anymore, my …. is going to fall off!!

    • Lacrimose Wolfe

      Well those cheerful souls will tell you to be glad you still have a belt 🙂

      • Tau’ri

        The belt will be taxed as it’s a “luxury item”.

  • Rene Nortje

    buy a house they said, at least its your house they said, remind me again never to listen to anyone again lol. pay off the bond or eat???? tough choices.

    • Konstabel Koekemoer

      What they never mention is that the interest rate hikes, rate and tax hikes, levy hikes, ever increasing maintenance and security costs are all yours. A house may still be a good long term investment but it does not come cheap.

      • Rene Nortje

        damn straight. tried to convince my wife that but you think that sunk in past that fairy dream a girls has….. get married get a house have some kids. Nice dreams but they tend to forget the $$$$$ behind that little fantasy

        • peterq

          Hang in there. My house only cost me the rates every month now that it is paid off. If I had rented I would still be paying rent (15000-20000) month against R1000.

    • In general terms, if you follow the alternative of renting property you’ll be no better off. The rental costs will roughly follow the bond-repayment prices: simple “supply and demand” economics.

    • Tech-Head222

      Fixed interest rates to car and house were the answer to my prayers.

      9% on the house
      12 on the car.

      • Hennie

        I did the same with my car but unfortunately the interest rate was never raised in fact it went down at the time I bought the car so in the end I paid more off on my car than what I should have. On a house it makes sense because over a period of 20-30 years it is bound to go up and you are lucky to have it penned at 9%.

      • Rene Nortje

        they wanted to give us 11% on house

        • Tech-Head222

          Try different finance houses.

          I got 12% because of an account, opened fraudulently under my name.which I did not pay.

          Got declined by Absa, try other finance houses, although this year is gong to be the worst time to buy a house

          • Rene Nortje

            we bought 5 months ago. its gonna hurt us for a while. toast and butter for the foreseeable future lol

  • Q Anthonie Burger

    I will never understand the reasoning of simply increasing interest rates so as to reduce inflation when clearly the reason for inflation is not an over abundance of money in the market (which is generally the time when interest rates goes up or else the economy overheats).
    Our economy is crashing becuase of poor decisions and poor service delivery by government and yet they still think increased interest rates will reduce inflation.

    That is why I believe that politicians are a useless bunch.

  • bengine

    … uh SARB did it ever occur to you that increased inflation figure might have something to do with you repeatedly hiking the IR in an economy that is in recession? Money for the extra interest has to come from somewhere?

Join our newest FREE BusinessTech newsletter today!