Durban – The increase in the price of crude oil and the knock the rand took after the spat involving Finance Minister Pravin Gordhan is responsible for the petrol price increase next week.
According to Neil Roets, head of Debt Rescue, one of the largest debt management companies in South Africa, the 44 cents a litre increase in the price of petrol and the 22c a litre spike in the diesel price effective next Wednesday will not be the last price increase of the year. He said he expected further increases in the price towards the end of the year.
“The ongoing political bickering within the ANC and an extremely sluggish economy is likely to impact on the rand and it looks as if the price of crude oil may also be on the rise,” Roets said.
One of the major effects of the increase on the economy is going to the continued rise in the price of food.
But he said the elephant in the room was the expected downgrade by the ratings agencies later in the year. â€œDespite efforts by the government to persuade the agencies the economy is on the mend, they are not buying it and the reasons are clear: corruption, and parastatals burning through taxpayers’ money.