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Petrol price set to rise again

Jun 05 2008 14:40

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Johannesburg - The retreat in the oil price has yet to be fully reflected in South Africa's petrol price calculation, which prints an under-recovery closer to 30 cents and suggests that even at current oil prices, pump prices will still have further to rise, say market analysts ETM.

This comes on top of the fact that the retail price of petrol in SA increased by 50c a litre yesterday, following the 55c a litre increase last month.

The price of unleaded petrol in Gauteng thereby increased to 996 cents a litre and to 972c at the coast.

Concerning flow-through effects are still being seen on the inflation front, with food producers, for example, passing higher transport costs on to the prices they charge. High global food prices have already added to the price burden.

SA's inflation rate currently stands at an uncomfortably high 10.4% and this has caused the central bank to become very hawkish on the outlook for interest rates going forward.

Brent crude futures were last at $121.77 per barrel, a dip of 0.33c on the day, but it remains off a very high base.

Rand weakness does not help oil import costs and the rand was last stuck in a weaker band between R7.75 and R7.80 to the dollar.

SA's central bank decides on interest rates on Thursday next week and the money market is convinced an increase of 100 basis points - taking the repo to 12.5% - will be announced.

- I-Net Bridge

 
 
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