Latest fuel price drop won't bring much relief - economist
While motorists are enjoying lower prices at the pumps from Wednesday, an economist says the drop in fuel costs won't give consumers the relief they desperately need.
Petrol has come down by R2.04 per litre.
Diesel decreased by between R0.46 and R0.56 per litre.
READ: Govt confirms drop in fuel price for September
Chief economist at Econometrix, Dr Azar Jammine, says the reality is that fuel costs are still significantly higher than they should be.
He says it remains to be seen whether the price cuts will have a knock-on effect on other goods and services.
"Those that have already passed on the increased fuel price to consumers are unlikely to rush in to reduce the prices that exist anytime soon and others are not going to chime in to provide relief to consumers either.
"So, certainly for a while, we will live with very high fuel inflation rate and the average consumer we continue to experience the effects higher prices."
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Jammine says there's also the lingering concern of a global recession.
"The cessation of oil supplies from Russia to Europe and other disruptions to energy supplies such as gas which the Russians have not cut off to Europe, this is going to result in sharply higher prices in Europe, much higher inflation that has been anticipated and as a consequence, the European Central Bank will have to increase interest rates quite sharply."
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