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Consumers will face higher transportation costs and the possibility of food price inflation as a result of rising fuel prices that came into effect Tuesday at midnight, warn economists. Unleaded gasoline with an octane rating will cost R16.02 as of Wednesday. According to the Ministry of Energy, the cost of the coastline will be 15.45 rand.
Paul Makube, a senior agricultural economist at AgriBusiness, said inflation should stay within the 3% target range set by the South African Reserve Bank. 6%, consumers will face higher costs for traveling and transporting goods.
"Particularly [hard] will be the poorest households, who spend a large part of their income on transportation," says Makube
. The cost of producing and transporting crops will also be under pressure, with 80%
"These costs will eventually be passed on to the consumer in the value chain as companies struggle to absorb the extra costs.
"The cereals are being harvested and heading for the silos. In addition to the increased travel costs for grain transportation, higher prices for crude oil are affecting the costs of fertilizers, pesticides and herbicides needed for agriculture, explained Makube. .
Christie Viljoen, a PwC economist, said the increase in fuel prices would increase production and delivery costs to retailers.
Costs should be recovered from buyers by higher food prices. READ MORE: Why is oil so expensive?
Burden of Debt
Price Rises Alleviate Pressure on Executed Consumers, Warned Neil Roets, CEO of Debt Rescue
Massive Unemployment Will Resolve Soon, and Debt Remains growing national will shrink, "he says.
"More than half of consumers have three or more months of arrears, and this Roets argues that […] mitigating the impact of rising fuel prices , Energy Minister Jeff Radebe, in a written response to a question about the rise in gasoline prices issued on Tuesday, Parliament encouraged motorists to avoid unnecessary trips, to use carpooling and practicing "economical driving techniques". – News 24
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