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In June, petrol becomes significantly more expensive, while diesel and paraffin become cheaper. Yet price shocks in crude oil are driving consumer prices to multi-year highs in several countries and forcing central banks to act.
Fuel markets show a split in June: petrol becomes more expensive, while diesel falls by 3.24 rand per litre. Yet this local price decline in diesel masks a bigger problem – global crude oil costs are pressing on consumer prices worldwide.
In South Korea, the effect is already measurable. Consumer prices have risen by 3.1 percent, driven by a jump in crude oil costs of 24.2 percent. At the same time, consumer prices there reached a 26-month high and fuel expectations of interest rate increases.
India is also feeling the pressure. The inflation rate could rise to 4.8 percent if crude oil costs an average of 90 US dollars per barrel in fiscal year 2027. India's central bank RBI is already responding: it will likely hold key interest rates, but could raise its inflation forecast from 4.6 to close to 5 percent.
The trend is intensifying in Europe. In the Netherlands, high energy prices drove inflation in May to 3.5 percent. Households feel the pressure directly: higher petrol costs and reduced tax relief on fuel are putting consumers under new inflation pressure.
The combination of rising crude oil prices and reduced government subsidies creates a dilemma for central banks. While central banks try to combat inflation, external shocks such as energy prices press on consumer prices – often beyond their direct control. The June fuel price changes are thus not just a local story, but a symptom of a global inflation wave that is forcing monetary policymakers in several countries to rethink.
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