What fuel’s vicious cycle means for South Africa
South Africa finds itself caught in an almost perfect storm on two major interconnected issues – a substantially weaker currency and the considerably more expensive price of oil. And both sides of this equation are problematic, as they both feed off each other in a vicious cycle.
As a net importer of fuel, South Africa is facing immense pressure. Massive petrol hikes affect every consumer, business and the broader trade linkages across the country’s economy.
Supply constraints from the Organization of the Petroleum Exporting Countries (OPEC), Venezuela’s current political crisis, and renewed tensions between the US and Iran all are factors well beyond South Africa’s control. As a result, the AA is warning of further – and potentially damaging – fuel price hikes next month.
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