Food and fuel prices to increase

THE fuel price is expected to increase by 83 cents a litre for petrol and 95 cents for diesel in April.
The Automobile Association (AA) made the prediction yes­terday, citing the rising oil price and an increase in the fuel levy of 30 cents.
“Although the rand/US dol­lar exchange rate has firmed in the rand’s favour over the past few weeks, the strengthening of international petroleum product rises has outstripped the rand’s gains.”
The Department of Energy has yet to confirm the official details of the increase. Mean­while, the sustained increase in oil prices, fears of a ratings downgrade and a deteriorating exchange rate by the end of the year, would hit motorists in the pocket, the AA said.
Compounding the woes fa­cing motorists was an expected increase in inflation.
Neil Roets, chief executive of debt management firm Debt Rescue, said a 7% inflation rate was predicted, with food infla­tion expected to rise to 12%.
He said the depreciating rand played a big part in rising prices. “Every commodity we import from abroad has to be paid for in US dollars and that includes crude oil,” he said, “and this impacts the cost of food.”
The drought was also push­ing up food prices, including staples like maize and wheat which were being imported, Roets said. “There is little the government can do to mitigate the prices of food, especially the cost of maize meal which is expected to increase by 50%.”
Independent economist Dawie Roodts said the Reserve Bank may have to increase the repo rate to deal with inflation. – Daily News Reporter

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