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Sat May 26 09:57:43 SAST 2012

Fuel price increases will push up food costs

AMUKELANI CHAUKE | 01 March, 2011 21:46
BRACE YOURSELF: The current rate of fuel price increases is expected to force motorists and consumers into a tight spot and push up food prices Picture:

South African motorists should expect a tough year ahead as yet another fuel price increase is expected when the transport levies that Finance Minister Pravin Gordhan announced in the budget kick in next month.

With an increase of 43c per litre, 95 unleaded in Gauteng will cost R9.42, while 93 unleaded and lead replacement petrol would now cost R9.25 a litre.

The price of diesel rose by 64c a litre.

This price increase is expected to be echoed on the first Wednesday in April, Econometrix economist Tony Twine said.

"We are currently anticipating upwards of another 40c per litre for the petrol price on April 6, which will include the 18c per litre tax and Roads Accident Fund levy increases," he said.

Gordhan announced in his budget speech last week that the levies on petrol and diesel will go up by 10c per litre.

The Automobile Association of South Africa predicts South Africans should expect a "tough year" ahead. Spokesman Garry Ronald said the increase was linked to unrest in the middle East, coupled with a demand for fuel after concerns over shortages.

Chris Hart, an economist at Investment Solutions, said commuters will now spend more.

Hart said fuel was a "key input cost for farmers", and higher fuel costs will lead to less production and higher food prices on supermarket shelves.

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