Fuel prices are expected to increase across South Africa, as from Wednesday.
The Department of Mineral and Petroleum Resources (DMRE) said the increase is due to continued tensions between the United States and Iran, around the Strait of Hormuz.
Petrol will increase by R3,27 per litre, diesel by R6,19 per litre, illuminating paraffin by R4,22 per litre and Liquified Natural Gas (LPG) by R5,07 per kilogram in Gauteng and by R5,78 in the Western Cape.
The current price of crude oil jumped from $93,6 during a ceasefire between Iran and the United States, to a current $101.
Analysts from Barclays Bank, foresee the price could go up to $110 per barrel, if disruptions in the Strait of Hormuz, continue towards the end of May.
While others suggest prices could reach$118 per barrel.
Governor Lesetja Kganyago delivered a public lecture at Rhodes University on supply shocks, monetary policy and the 3% target, on Monday.
Kganyago said “we are experiencing the biggest jump in fuel price inflation in the history of inflation targeting. Fuel is going from deflation to double-digit inflation. There is no doubt this is a large shock. Whether we will see multiple shocks is less certain. The rand exchange rate has been surprisingly resilient so far. It depreciated in March but then recovered to roughly pre-crisis levels. Many of our peers have had similar experiences.”
He also said there is a possible El Niño pattern next year, which means drier growing conditions in Southern Africa.
This may lead to persistently higher food inflation on top of the fuel shock.
Picture: Cyprus Brokers