Deputy Finance Minister David Masondo has warned that with South Africa being a net importer of oil, the persistent conflict in Ukraine is having a severe impact on fuel prices which, in turn, is driving up food prices.
Participating in a Parliamentary debate that looked at the economic impact of the conflict on the South African economy, Masondo said there is the prospect of persistent supply and demand imbalances, which risks driving inflation higher and tightening financial market conditions.
“Since the conflict, there have already been sharp increases in the prices of crude oil, maize, wheat, and sunflower oil futures contracts. This is likely to persist until a resolution to the conflict is found,” he said.
The Deputy Minister said higher fuel and grain prices erode the disposable income of consumers.
He said this as local fuel prices recently went up to more than R21 per litre for the first time ever.
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