The conflict in Ukraine might be geographically far removed from South Africa, but its ripple effect might soon be felt by local consumers. | Fin24
If the Russian invasion of Ukraine - described by some as the darkest hour for Europe since World War 2 - is not resolved quickly, SA could feel a squeeze from spikes in petrol prices, as well as earlier and bigger interest rate hikes by the SA Reserve Bank to curb inflation, and higher bread prices.
Before the latest oil price spike, the petrol price looked set for a hike of around R1.25 a litre in the first week of March. This would push the price of 95 octane petrol in Gauteng to a record high of above R21. Analyst Peter Attard Montalto of Intellidex, thinks there could be a R1.30/litre petrol price hike in March and maybe another 30c/l to 40c/l hike in April - despite the freeze on a fuel levy increase.
"The conflict in Ukraine will slow down global growth, which has just been recovering from the Covid-19 lockdowns. What that means for SA is a further disruption of demand for our goods," cautions Leoka. The combination of higher fuel prices, pricier wheat and a weaker rand will push inflation higher in South Africa.
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