“Fuel hike doesn’t signal economic downturn”

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Economist Azar Jammine says he’s confident that the massive hike in fuel prices does not spell a major downturn in the economy.

He however says it will slow down consumer spending as a result of high inflation.

The retail price of petrol will increase by 82 cents per litre from midnight on Tuesday next week, pushing the price of petrol to a record high of above R15 a litre.

This is the third consecutive increase this year.

Diesel will cost 87 cents more and paraffin will go up by R1, 09 a litre.

LP Gas will rocket by R1, 38 per kilogramme.

The increases have been attributed to the rise in oil prices and a weaker rand.

“Consumers benefited between January and March with a reduction of more than R1 a litre in the price of fuel, then it shot up in April and in May, retracing the ground that the price had fallen in between January and March. And now suddenly in June the extra big jump is going to take us into significant new high territory. It is clearly going to increase the inflation rate and that will obviously slow down the ability of consumers to keep spending.”