The retail price of 93 octane leaded, 95 unleaded and 97 octane leaded rose by 22c a litre at midnight and experts fear that the hike will fuel inflation.

The retail price of 93 octane leaded, 95 unleaded and 97 octane leaded rose by 22c a litre at midnight and experts fear that the hike will fuel inflation.


The price of petrol, which increased by nine cents a litre last month, now stands at R4,39 a litre at the Reef and R4,32 at the coast. The previous record was in May 2002 at R4,32 a litre in Gauteng and R4,21 at the coast. The diesel price increased by 14,7 cents a litre, but paraffin declined by five cents a litre.


The Department of Mineral and Energy Affairs says the increase is due to higher international prices of petrol and diesel. On top of that is an increase of 10c a litre on the fuel levy and the Road Accident Fund of five cents a litre.


For every 10c the rand strengthens against the dollar, the petrol price drops by one and a half cents. But the fuel price hikes this month are likely to boost inflation, which is already on an upward trend. The Reserve Bank's targeted inflation measure, CPIX (consumer inflation less mortgages), which grew 4,8 per cent year-on-year in February, is expected to reach the six per cent limit of the inflation target later this year.


Brait economist Colen Garrow said the increase added further weight to calls for a rate hike: "By when and how much the first possible rate hike may be will become a hotly debated topic".


Absa economist Jacques du Toit said the petrol price hike would place upward pressure on transport costs, increasing the operating costs of business.


He said these higher costs might be passed on to consumers, which would "add slightly to the inflationary pressures already in the economy due to high food prices and drought conditions".


However, consumers may get some relief from a drop in petrol prices expected in coming months, Econometrix senior economist Tony Twine told .


"How much will depend on crude oil and refined product prices during the month, and the volatility of the rand," he said.