When will we feel the impact of the rising oil price?

The rising oil price, amid escalating tensions between the US, Israel and Iran - have consumers around the world worried.

702's John Perlman asked independent economist John Loos when South Africans are likely to feel the impact.

"The earliest possible impact is the petrol pump price. The way oil prices have gone so far, looks like a likely significant increase early in April.

"What one needs to understand too is that there's a whole lot of imported inflation that comes with this because fuel - be it petrol, diesel most notably - is an input into a large part of the economy. So with time it seeps through into production processes.

"Diesel is used in agriculture for instance - quite significantly. In the production as well as the transport of produce so one can see some impact on food prices. But there's plenty of others. So there's a second round effect if you could call it that - the fuel prices would filter through to the rest of the economy, with a lag, and you could then see a broader, higher CPI, inflation rate when these get passed onto the consumer."

Will we see interest rates going up again?

"I suspect that this month the cut is not on the cards. I think it would probably be most likely interest rates on hold. I don't think the Reserve Bank would be in too much of a hurry. I think they'd want to wait and see what transpires. And let's be honest, people make all sorts of predictions but trying to predict the outcome of this conflict, when it ends, how far it goes, how much it disrupts oil is almost impossible.

"So, it's a risk factor, you know certainly we've seen a significant rise in oil prices to date but where it goes from here is very unpredictable so one would have to wait and see.

"If by the end of the month there were signs the conflict was petering out for some reason or some sort of negotiated settlement, I think the Reserve Bank in all likelihood would keep rates on hold and watch oil prices decline. So the answer is - it depends."

South Africa has steadily built up its trade relations in the Gulf so there must be exporters who can't get their goods there.

What sectors of the South African economy might be affected if this conflict goes on longer?

"A fuel supply disruption can affect global production quite significantly to the extent that the world can periodically go into a recession. The oil price shock of 2008 sent the world into a recession, '74 sent the world into a recession. So then the demand globally for South Africa's minerals for instance and even for manufactured products starts to diminish quite noticeably. So, I think that's the bigger threat."

To listen to Loos' full discussion with Perlman, click the link below: