South Africa Gasoline Prices Hit Record High After Oil Shock Drives Increase - Bloomberg
South Africa will pay a record price for gasoline as the latest oil shocks caused by the Iran war catch up with monthly pump adjustments. The retail price of 95-octane gasoline in Gauteng will climb by 3.33 rand ($0.20) per liter on Oct. 7, lifting the price to 30.25 rand per liter, the highest on record. The 12% increase follows oil advancing to around $100 per barrel as the US and Iran exchanged attacks and a drone attack shut Saudi Arabia’s East-West Pipeline. Households in Africa spend proportionately more on transportation due to reliance on road travel and lack of public transport. The rise could pressure the South African Reserve Bank to raise interest rates again to defend its 3% inflation target. Consumer-price growth reached 4.4% since the war began in late February, prompting two rate hikes this year. Fuel contributes almost 4% to the consumer price index and fuels other inflationary pressures. Policymakers expect headline inflation to rise above 5% later this year and early next before returning to 3% by 2027.
South Africa initially cut fuel taxes to cushion higher prices but limited relief to three months, expiring in June. In 2022, the government sold strategic oil stocks to fund a subsidy. Last year, lawmakers expressed concern about insufficient crude stockpiles.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing