The price of petrol goes up by 41 cents a litre today. This will push up the petrol price in Gauteng to a record R12.27 and with more increases expected in the coming months, economists say the inflation outlook for 2013 looks bleak and the poor will be hardest hit.
The diesel price is to go up by 0.01% to R11.33 a litre.
The rand has weakened significantly over the past few months as the severe economic slowdown in Europe and America subsides. The weakness of the rand means the country is now paying more for imports, especially oil.
That means further increases in the price of basic needs, like food and transport, are in the pipeline.
Eskom's push to increase the price of electricity by 16% a year over the next five years is another key contributor to the country's bleak inflation outlook.
Despite rising inflation, the Reserve Bank is not likely to hike interest because economic growth remains fragile.
Finance Minister, Pravin Gordhan is expected announce a new set of measures to cushion the poor from the prevailing tough economic times.
Fuel price increases can also have a negative impact on fuel station owners. Leslie Mitchell, MD of Garagesure Consultants & Acceptances told News24: “A petrol retailer’s profit is fixed for every rand of fuel sold, regardless of the fuel price. Fuel price increases do not mean that your local fuel retailer makes more money – potentially the opposite.”
“When the fuel price rises by a significant margin, the R200 that bought 18 litres of fuel is now maybe only buying 16 litres. Many people will rather travel less than pay R20 more for fuel, which in turn has an effect on the volumes being sold by fuel station owners and results in lower spending in the convenience stores at the petrol station forecourts.”
He said there was also the problem of the owner being suddenly under-insured on the value of the fuel inventory a petrol station is holding.