SABC News reported today that the petrol price in South Africa is set to go up next month. It is expected that the price of petrol could go up by between 40 and 45 cents a litre, resulting in a litre of unleaded petrol costing approximately R8.

For once it does not seem like this increase is due to rising world oil prices as they have remained fairly constant over the last few months. The reason for this astronomical rise is largely due to the weak Rand. The Rand has softened to around R7.80 to the US dollar over the last few days whereas it was almost R6 a few months ago.

The Rand has been under pressure largely due to the electricity problems currently being experienced in South Africa. Some believe that this electricity supply problem will have an negative effect on growth in South Africa and thus investors are pulling out of south Africa or not looking to invest more until the electricity problem is resolved.

A few weeks ago The Rand Today published a post asking the question ‘Are power cuts affecting the economy?’ It now looks like that answer is a definite YES judging by the softening of the Rand and the potential petrol price increases due to the soft Rand.

It could turn out to be a tough year in South Africa with analysts predicting the Rand to only start recovering at the end of the year. That could mean the price of petrol will remain around the R8 a litre mark for the rest of the year unless there are drastic drops in the world oil price which do not look likely. If the petrol price goes up, everything else tends to go up in price to. That means inflation will go up as well. UP UP UP, seems to be what is happening to everything in South Africa today!

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