Post Looting Petrol Price Hike
Weaker Rand Leads To Pricier Petrol
As a result of the recent criminal looting spree in areas in KZN and Gauteng, the international markets dumped Rands and the value dropped verse currencies like the US Dollar.
Since SA has to buy oil (which becomes petrol) in Dollars this means that when the Rand gets weaker, SA has to spend more Rand to buy the same amount of barrels. This then means the Petrol stations charge more per litre so they can maintain their profit margins.
An expected price hike of 87 cents/litre will hit around the end of the month.
Internationally, the different countries that produce and sell oil have stopped fighting among themselves again and settled on their price fixing strategy (and limiting how much oil they will produce). This is also another reason why oil prices are going up (because they have decided it will).
High Fuel Prices Mean Higher Everything Prices
When petrol costs more, it means it is more expensive to move things from ports like Durban to the interior of the country. This pushes the cost of goods up (slightly). It also means the taxis and busses will want to look to start charging more for fares. This means (slightly) less money in the pocket of employees at the end of the day.
‘when the Rand gets weaker SA has to spend more Rand to buy barrels’
Businesses too will end up paying more for stock and will, as a result, push up prices (slightly). All these small price hikes and loss of earnings due to inflation add up and eventually, you will begin to feel it. Particularly, if inflation figures climb and the SA Reserve Bank (SARB) look to hike the Repo Rate. That then hits consumers with debt as they will have to pay more interest on the debts they already have. They then have less to spend at shops and businesses who will feel the pinch of less customers during an already hard time.
So, higher oil prices and a weaker Rand ultimately means everything becomes more expensive and all because of a looted Flatscreen TV.