Higher fuel prices push South Africans to the edge as cost of living bites

By Siphelele Dludla

The unrelenting high cost of living, which has been exacerbated by the latest fuel price hike is pushing the country further towards the precipice of social unrest similar to that seen during the July 2021 riots.

This is the warning issued by Efficient Group’s chief economist Dawie Roodt who, yesterday said the fuel price increases were going to push people to the edge as the prices of consumer goods would also be impacted.

The latest fuel price increase comes in the wake of steep interest rate hikes announced by the SA Reserve Bank last month, and a massive 18.65% increase in electricity tariffs looming in April.

Roodt said that cash-strapped consumers could only take so much of the economic hardships brought about by the energy crisis, high inflation, elevated interest rates and unemployment.

“The real answer is that we need decisive and real political leadership to make serious and unpopular decisions. At the moment we are very indecisive,” Roodt said.

“This indecisiveness will lead to an explosion. The day is going to come when the lid gets blown off this thing. We must be careful with how we handle these things.”

Last year the government implemented a temporary reduction in the general fuel levy of R1.50 per litre for four months to provide limited short-term relief to households from rising fuel prices following the Russia/Ukraine conflict.

Asked whether the government should consider this relief again, Roodt said he was not in favour of this because the national fiscus needed the money raised by the levy.

“The government can reduce the fuel levy because they can, but it’s not a clever idea. And the reason for that is that the state of our finances is not in a good shape,” he said.

“Even the finance minister (Enoch Godongwana) did not increase the fuel levy for 2023. The fuel levy is a bad tax, but it’s better than other taxes.”

The Department of Mineral Resources and Energy (DMRE) on Monday announced that fuel prices will increase from today, Wednesday, because of the cost of international products – based on the oil price – and a weaker rand versus the dollar.

The DMRE said fuel prices were rising due to lower inventory levels globally and closures of refineries in some countries for seasonal maintenance.

Unleaded 95 and 93 petrol will cost R1.27 a litre more and rise to R22.30 at the coast and R22.95 inland.

Diesel will go up by between 30c and 32c per litre while illuminating paraffin will increase by 13c a litre.

The maximum retail price for LP gas will be R5.22 a kilogram more due to higher freight rate and propane and butane prices during the same period.

According to the latest Household Affordability Index by the Pietermaritzburg Economic Justice & Dignity group (PMBEJD), South Africans are already paying more each month for basic food items that they simply cannot do without.

Debt Rescue CEO Neil Roets yesterday said with each new price increase the population was sinking deeper into a financial pit that was not of their own making.

“In light of this untenable scenario, which is exacerbated by the spiralling price of staple foods and drinks like potatoes, cooking oil, bread and eggs, each price hike is akin to rubbing salt in an open wound,” Roets said.

“Consumers are being squeezed from all sides. How much longer can they realistically be expected to hang on?”

Trade union UASA yesterday said that cash-strapped consumers should review their budgets as they have to contend with the unrelenting high cost of living for another month.

UASA spokesperson Abigail Moyo said the knock-on effect of the higher fuel price would put transporters and commuters under extra pressure.

“The consumer will ultimately pay increased prices for transported goods and for public transport as goods and service providers will make sure their businesses stay afloat,” Moyo said.

“Car owners and commuters will have to pull their belts tight against the onslaught of the increases.”

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