Economist, Dawie Roodt said fuel price increases will continue in 2017, following an announcement this week, that the price of petrol would rise by about 50 cents on Tuesday night.
The coming increase had been attributed to stronger global oil prices and the weaker rand.
Roodt explained there were several other factors to take into consideration, as he made some longer term forecasts on Saturday.
“Interest rates internationally are likely to go up,” Roodt told the SABC.
“There are two variables that affect the petrol price; one is the exchange rate of the currency. I think it is important to realise that where the currency is at the moment, it is usually undervalued. The rand should trade well below R10 to the US and that just goes to show what the risk premium is that we are paying because of uncertainty regarding SA,” added Roodt.
However, the implications do not end there for South Africans, as government will clearly need greater revenue to compensate for the increases.
“The second factor is the international oil price. I think the oil price will stabilise between 60 and 65 dollars, so there is a possibility of a further increase in the petrol price. Also the minister of finance is in need of more tax revenue so there will be tax increases and there will be an increase in the fuel levy,” added Roodt.