Top economists have predicted further fuel hikes towards the end of the year, meaning holiday travel will see elevated costs for many consumers in South Africa.
The big jump in prices for both petrol and diesel, with both 93 and 95 octane petrol increasing by 51c/litre and diesel by R1.43/l, means that motorists are most likely to be forking out R22.57/l for 93 octane petrol at the pumps and R25.49/l from Wednesday onwards.
In contrast, the average international product prices for petrol, diesel and illuminating paraffin decreased during the period under review.
The price hikes have been attributed to the depreciation of the rand against the US dollar in the period under review.
CEO of Debt Rescue Neil Roets, who frequently highlights the plight of consumers, says: “Regardless of the economics behind this hike, it is devastating news for South Africans who were counting on a little financial relief over the festive season to briefly shrug off the economic woes of the past year, and recharge their batteries.
“This hope has just been obliterated. There will inevitably be a corresponding hike in public transport costs, and this means that many working-class citizens who have been looking forward to this once-a-year occasion to visit their families, will simply not be able to afford the travelling costs this year.”
The price hikes in petrol and diesel will also unavoidably result in more food price increases, at a time when two-thirds of the population can no longer afford three square meals per day.
The questions remains, Why are our retailers not doing absolutely everything they can to bring down the price of basic foodstuffs, to provide relief to consumers during the country’s cost of living crisis?
This question mark has been escalated by Mervyn Abrahams of Pietermaritzburg Economic Justice & Dignity Group, creators of the Household Affordability Index, who says that although petrol prices dropped in recent months, we haven’t seen a corresponding drop in food prices at the retail level.
“South Africans are paying nearly 14% more for basic food items than they did a year ago. This is over and above the steep electricity and petrol prices; not to mention the interest rate hikes that have completely decimated people’s budgets,” laments Roets.
“The Financial Action Task Force’s threat of grey listing also looms large in November,” he added.
“Disinvestment in the country will result in further interest rate hikes and we will see a massive spiral downwards. We could see the country plunging into a deeper recession, with catastrophic consequences for food security, and an ever-deepening food crisis.”
He says that the petrol price hike will lead to South Africans leaning even more heavily on their credit and store cards to be able to celebrate the festive season in some kind of way. For many this will simply mean putting enough food on the table; starting out the New Year in even more debt.
“My advice to those who fall into this trap is to seek help from a registered debt counsellor who can assist them to manage their financial predicament. This has been a very successful solution for thousands of consumers who are plagued by over-indebtedness,” concludes Roets.
Andra Nel, the purpose manager from KFC’s Add Hope, echoed Roets’ concerns and encouraged consumers to think of the children in South Africa who will be falling on harsh times during the festive period this year.
Listen to Nel’s comments on the impact the economic situation will have on consumers below:
Tertia Jacobs, a treasury economist at Investec, told Business Report that it seems likely that there will be another fuel hike for month of December.
“If you take into consideration the November fuel hike, we could see another hike in the region of 50c/l once again. Transport costs for holidaymakers will, unfortunately, be relatively steep. Costs for businesses will also see an increase as diesel will see increased input costs for them. This could lead to food prices remaining elevated as well.”