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Weak rand and hurricanes send petrol price to record high

News24 reports that the petrol price is set to hit an all time high this next month, with 93 and 95 unleaded shooting up by 99c and R1 per litre respectively.

It could be worse, if you drive a diesel vehicle that’s going up R1.24 a litre.

The reason for the dramatic rise is mainly down to the rand’s weakness. It went from R13.90 to the dollar to R14.90 last month.

Another reason is that the price of oil also rose in this period – OPEC isn’t upping its supply, and the hurricanes in the US have damaged America’s fuel infrastructure.

Which means the price of oil went up from $74.25USD to $78.25 per barrel.

My Take

So what’s the problem with the rand?

We have just had a raft of bad news about the economy. We are in a recession, with the worst performer being agriculture, the precise sector being discussed for expropriation without compensation.

Meanwhile according to Mike Schussler (as reported by the Times LIVE) we have fewer adults working than not.

Not only that, but South Africa’s crime problem is also a major issue – our murder rate has risen. Why is this a problem? Because tourist don’t want to get murdered, and they are a source of foreign currency.

Even in terms of banking, the EFF recently submitted a bill to nationalise SARB – which would mean that the next time a guy like Mosebenzi Zwane threatened their banking licenses, they could more easily follow through on it.

While Cyril Ramaphosa has released an economic turn-around plan, it remains to be seen how it will be paid for and just how much of it is even possible. The issue around protecting our poultry farmers for example could threaten our participation in the Agoa trade agreement.

Throw in the current US economic policy of engaging in trade wars and the economic crisis in Turkey, which impacts all emerging markets, and things are not looking good.

The thing to realise here is that things are going to get worse before they get better, if they get better.

To a large extent we need a new government in order to restore some level of trust. With the ANC right now there is no honeymoon period in which people are willing to give it a chance and see if what its doing works, which makes it much, much more difficult for them to achieve anything.

Not only that but because they’ve been in power for so long, the rot has set in so deep that murder is playing a part in the ANC’s internal politics.

There isn’t much we can do about external factors, we can’t control Donald Trump or Turkey, and we cannot force the world to take action on climate change. What we can do something about is the stuff going on in our country.

And that is where I see a lot of failure and not much progress.

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