Efficient Group founder and chief economist Dawie Roodt said South Africans should expect an increase in the price of petrol and diesel because of higher taxes.<\/p>\n
On Wednesday,\u00a0the petrol price was cut<\/a><\/strong>\u00a0by R2.06 per litre while diesel price decreased by R2.81 and R2.69 per litre from 50ppm and 500ppm, respectively.<\/p>\n The Department of Mineral Resources and Energy said the average Brent Crude oil price decrease was behind the fuel price cuts.<\/p>\n Oil prices also continue to drop in response to fears of a global economic recession, which is good news for consumers.<\/p>\n However, Roodt warned that South Africans should not expect petrol and diesel prices to continue to decline.<\/p>\n \u201cI am sure we will see an increase in the petrol price in March because the finance minister always increases the fuel levy during his February meeting,\u201d he said.<\/p>\n \u201cThe increase in fuel taxes is very painful, but a tax on petrol is less damaging to the economy than an increase in company or personal income taxes.\u201d<\/p>\n Apart from tax increases, the fuel price is mainly driven by the rand exchange rate and the oil price.<\/p>\n The oil price is significantly influenced by the conflict in Ukraine. The war negatively affects the oil supply, which drives up the price.<\/p>\n On the other end of the scale, global recession fears are driving the oil price lower because of lower demand.<\/p>\n \u201cI expect the oil price to gradually decline because of increased supply with countries like Venezuela pumping more oil.\u201d<\/p>\n Roodt added that the rand strengthened in recent weeks, which can continue, all things being equal.<\/p>\n The combination of a stronger rand and lower oil prices will be good news for petrol and diesel prices in South Africa in the short term.<\/p>\n However, the situation looks less rosy in the longer term.<\/p>\n \u201cI expect the rand to come under pressure in the longer term, which will filter through to the petrol price,\u201d Roodt said.<\/p>\n This article was first published by Daily Investor and reproduced with permission. Read the original here<\/a>.<\/em><\/p>\n
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