Recent diesel price hike raises concerns of knock-on effect on inflation

With some fuel prices increasing at midnight on Tuesday night, there are concerns that the significant rise in diesel prices will once again affect inflation.

The price of petrol decreased by 12 cents a litre for motorists, so there was some good news but there were increases of between 88 and 98 cents a litre for diesel depending on whether you live at the coast or inland.

Illuminating paraffin sees increases from 79 to 82 cents a litre.

Fuel prices have been rising dramatically over the past few months and the slight decrease in the petrol price is little relief.

“The average product prices of petrol decreased while diesel and IP increased due to shortage of middle distillate in the market,” said the Energy Department’s Robert Maake.

He said that the significant increases in the prices of diesel and illuminating paraffin would have a substantial impact on the cost of living in South Africa.

Oil prices are still high due to the war in Ukraine.

Germany has become the latest country to suggest stricter sanctions on Russian oil and gas.

Economists are worried that this will continue to drive prices higher, which has a direct impact on inflation.

-EWN

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