South Africa’s petrol price increases of R1.21 per litre on Wednesday puts petrol inflation at 33.9% year on year, says Kevin Lings, chief economist at Stanlib.<\/p>\n
With electricity inflation also at 14%, South Africa’s energy cost is now far outpacing incomes, he warned, adding that access to reliable and affordable energy sources is critical for South Africa’s economic success.<\/p>\n
Speaking to radio station 702<\/a><\/strong>, Lings said that the considerable petrol price increases seen earlier this year didn’t have as significant an effect on households, as people weren’t travelling as much due to lockdown restrictions.<\/p>\n “There’s obviously a huge price effect that we’re now going to have to deal with more fully because we’re obviously trying to open up the economy and we’ve got the prospect of a bit more domestic tourism, people moving down to the coast for holidays,” he said.<\/p>\n Based on current metrics, Lings said that another increase was likely in December.<\/p>\n “Unfortunately, given where the currency is right now, there would be next month another increase of around 50c a litre if the oil price stays where it is, and the currency stays where it is. That would take us to R20 a litre.”<\/p>\n “If you’ve got electricity at 14% inflation and fuel at 34%, those increases are well in excess of any household income or business activity growth.”<\/p>\n Once SA\u2019s petrol price increases by R1.21\/l on Wednesday, petrol inflation will be 33.9% year on year. With electricity inflation at 14%, the cost of energy in SA if far outpacing incomes. Access to reliable and affordable sources of energy is critical for SA\u2019s economic success<\/p>\n \u2014 kevin lings (@lingskevin) November 2, 2021<\/a><\/p><\/blockquote>\n\n