5 June 2018

South Africa: Fuel Price Hike - The Knock-On Effect on Your Pocket

Cape Town — Economists have warned that the 85c rise in the fuel price will have far-reaching effects on goods and services, Eyewitness News reports.

"There are international factors that, unfortunately, will influence inflation, which ultimately means interest rates won't come off again in the short term as well. This will have all sort of knock-on effects on consumers," said Nedbank economist Dennis Dykes.

Bus and taxi commuters will feel the pinch too with fares set to rise as well, according to IOL. Janine Myburgh, President of the Cape Chamber of Commerce, warned of the economic effects that would entail. The Automobile Association said this month's price hike also included a large deficit carried over from April.

"The Department of Energy's monthly close-out happened early due to the public holidays in April, after which the rand lost almost 60 cents against the US dollar in a day. This meant a substantial fuel price rise was a near certainty from the start of May," the association said in a statement.

"The Western Cape economy is already burdened by the drought, our limping rail service, and we have just come out of a destructive bus strike and the potential of further taxi disruption The increase in fuel prices does not only affect commuters, but also negatively affects all aspects of society and business," she said.

Zwelinzima Vavi of the South African Federation of Trade Unions lamented that workers' salaries were not being raised to compensate for rising prices in this Eyewitness News report.

"Workers are getting a serious pounding. We're getting poorer at a time where [wage] increases cannot match up. All the deals we are finding are way below that."

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