Fuel price increase will have devastating effect on consumers
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Cape Town - The impact of the looming petrol price increase, of around 83 cents a litre, is a difficult pill to swallow for residents who say they are already struggling to get by.
The Automobile Association (AA), in a statement, said all fuel types were expected to be more expensive in August.
The fuel price is adjusted on the first Wednesday of every month.
The association said that these new increases will mean the price of petrol will have climbed nearly 23%, in just seven months, since January.
“ULP95 cost R14.86 a litre in January, compared to the expected new price of around R18.22 in August.
“In January, a litre of diesel cost R13.00 compared to the expected August price of R15.56 a litre, while a litre of illuminating paraffin is expected to cost around R9.61 when the price is adjusted for August, compared to its price of R7.39 in January.
“These increases will add to the heavy financial burden for South Africans already battered by weak economic conditions,” AA said.
Economist at the Bureau for Economic Research Nicolaas van der Wath said part of the increase this year was a recovery from the slump in the petrol price, due to the lockdown last year.
“The petrol price fell from R15.20 per litre in March 2020 to R11.52 in May, a 24% decline. It took nearly a year for the petrol price to recover, as it only reached R15.62 in March this year,” said Van der Wath.
He added that, since then, the petrol price increased beyond the initial correction due to a number of factors, including the oil price increase, the weakened rand in July, and increased Road Accident Fund (RAF) levies.
“The current increase in fuel prices is much above consumer inflation and wage increases, and therefore implies that households will have to set aside a bit more for fuel and transport,” Van der Wath said.
Cape Town resident Romario Brown, 27, who drives to work everyday, said it was tough given that petrol prices were already high.
“It is really difficult, at this time, for anyone who has a car – we are already paying so much for petrol.
“You end up having to cut other things – electricity or food.
“Transport is a big issue, people leave jobs because getting to work costs too much money.
“I know some people are now looking into getting bicycles and travelling in groups as a cheaper alternative,” said Brown.
Manenberg Women’s Forum coordinator Amelia Tara said fuel increases would also have an impact on food prices.
“Every time they increase the fuel price, there is a limitation of movement.
“People don’t get to the places they should, to make sure their needs are met.
“With food prices increased, it means hunger will increase. Young men become frustrated as they do not know how to deal with the crisis, resulting in a ripple effect of violence, as a consequence of economic challenges,” she said.