JOHANNESBURG (AP) – South Africans are bitten by rising fuel prices as a result of Russia’s war in …
JOHANNESBURG (AP) – South Africans are bitten by rising fuel prices as a result of Russia’s war in Ukraine and rising Brent oil prices.
Neighboring Zimbabwe and other African countries are also struggling to raise fuel prices.
In South Africa, the continent’s most developed economy, gas prices have exceeded 24 rand ($ 1.50) per liter, which is more than $ 5.80 per gallon. Diesel prices have also risen.
The latest increase makes fuel in South Africa about 40% more expensive than a year ago. To try to curb price spikes, the government cut fuel sales tax.
The government said the increase was due to rising Brent oil prices.
Rising fuel prices are the latest addition to South Africa’s economic problems, which include an 34.5% unemployment rate and an economic downturn caused by the COVID-19 pandemic, which has led to the loss of approximately 2 million jobs.
Economists warn of a further increase within a year that will hit consumers who are already dealing with rising spending on food, electricity and transport, said University of the Witwatersrand economist Professor Gianni Ross.
The poor, who are already facing economic difficulties, will be most affected, he said.
“The government needs to do what it expects from ordinary people, also cutting costs and using government money sparingly, because lowering the fuel levy will have a big impact on its revenue collection,” he said.
“I’m not happy with the raise, it’s too much. Now it will be too difficult to buy food for the children, we will eventually have to sell our cars to avoid spending on petrol, ”said Saueta motorist Mvelas Muki, waiting in line at the gas station to refuel his car before increasing the petrol. came into force at midnight.
Fuel prices have also risen in neighboring Zimbabwe. Gasoline now costs about $ 1.70 per liter, compared to $ 1.44 before Russia’s invasion of Ukraine. The government links the growth to the war in Ukraine.
To reduce fuel prices, Zimbabwe has reintroduced mandatory mixing of gas with locally produced ethanol. Starting Wednesday, gasoline will be blended with 20% ethanol, which will reduce the price of the pump by 7 cents, Information Minister Monica Mutswangwa said.
The Zimbabwean government said this week that it would also begin upgrading an oil pipeline from the port of Mozambique to Beira for $ 20 million to increase its capacity and reduce domestic dependence on trucks to deliver fuel.
Zimbabwe’s annual inflation rate has risen to 66% due to rising commodity prices in response to rising gas prices. The state-owned bus company more than doubled its fare last week.
Uganda is also struggling with rising fuel prices since 2021 after the government increased excise taxes on petroleum products. However, in recent months, prices have risen even higher due to a short period of deficit in neighboring Kenya, as well as what the government considers inflationary pressures as a result of the war in Ukraine.
A liter of gas in Uganda now costs about $ 1.50, which has risen sharply from an average of $ 1 in early 2021.
The East African country is vulnerable to price shocks because the government is not involved in price interventions, said Stephen Caboyo, an analyst with Ugandan asset management firm Alpha Capital Partners.
“In Uganda, the oil market has been liberalized and prices are determined by market forces, unlike other regional countries, where oil prices are subsidized by governments,” he said. “Therefore, any change in world oil prices is directly transferred to local pump prices.”
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AP reporters Faray Mutsak from Harare, Zimbabwe, and Rodney Muhumuz of Kampala, Uganda, contributed.
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