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Fuel price hikes to go on for at least 6 months, warns economist

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With no end in sight for external factors that are creating the perfect fuel storm including the ongoing war in Ukraine, the sanctions, and boycotting the Russian oil and gas, South Africa is likely to continue to see fuel price increases, Efficient Group economist Dr Francois Stoffberg has warned.

Stoffberg warned consumers to brace themselves for more fuel price hikes in the next months.

This, as government is expected to increase fuel prices yet again on Wednesday.

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Last month’s fuel price hike saw both petrol and diesel rise by more than R2 a litre pushing it to over R25 per litre inland.

“Most likely we will continue to see fuel price increases locally, some of the external factors that are creating this perfect storm include the ongoing war in Ukraine, the sanctions, and boycotting the Russian oil and gas. That puts pressure on fuel prices globally,” says Stoffberg.

Read also: Ever-rising fuel prices push inflation to a 5-year high

“The rate increases in the United States, the dollar is at a record high against a basket of currencies, including the rand.”

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Stoffberg says the hikes are likely to remain for the next 6 to 12 months but expects the fuel price to decrease thereafter.

“After that, we should see a strong decline in petrol price, because the world is already moving from away from fossil fuels, crude oil and moving towards work from anywhere and the demand for fuel will fall drastically and supply sheet continue to decrease.”

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