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‘Fuel price hike could tank economy’

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"There will be an additional increase of 15c for the fuel levy and 5c for the RAF levy (which don’t apply to illuminating paraffin)."

File picture: Karen Sandison/African News Agency (ANA)

MOTORISTS should brace themselves for another massive fuel price increase on Wednesday.

The Automobile Association (AA) said that strong oil prices and an ever-weakening rand have led to another fuel price hike. This is confirmed by the unaudited month-end fuel price data released by the Central Energy Fund.

“These increases will be compounded by rises in fuel taxes which come into effect in April. There will be an additional increase of 15c for the fuel levy and 5c for the RAF levy (which don’t apply to illuminating paraffin),” the AA said.

The Energy Department announced that the price of 95 octane petrol will increase by R1.31 a litre for inland provinces, while motorists on the coast will have to fork out R1.26 more, while 93 unleaded increases by R1.34 a litre for landlocked regions and R1.29 at the coast. Diesel will increase by between 81c and 82c a litre.

Minister of Energy Jeff Radebe said the increase would be effective this Wednesday.

Radebe blamed both local and international factors for the shocking increases. These included the depreciation of the rand against the US dollar, the increase in the price of crude oil, the increases in fuel and Road Accident Fund levies.

“South Africa’s fuel prices are adjusted on a monthly basis and are informed by international and local factors. The factors include the fact that South Africa imports both crude oil and finished products at a price set at the international level,” said Radebe.

The AA said that it is concerned about the rand’s trajectory.

“The currency’s slide might reflect an accelerating loss of appetite for foreign direct investment in South Africa. We urgently call on the government to take concrete steps to address the economic weaknesses which are affecting the country’s attractiveness to foreign capital,” it said.

People Against Petroleum Price Increases spokesperson, Visvin Reddy, said South Africans were really feeling the pinch.

According to Reddy, the latest increase will have a catastrophic impact on everyone, especially the poorest of the poor.

“It shocks us that the ANC-led government is oblivious to the fact that over 55 percent of the people live in abject poverty. About 26 million people have just one meal a day. Fuel increases have a direct impact on the price of food, the cost of transport and so much more,” he said.

Stanford Mazhindu, spokesperson of United Association of South Africa (UASA), said the cash-strapped working class will be the hardest hit by the fuel increases.

Economists have also raised concerns about the fuel price affecting the growth of the economy. “This will most likely result in inflation rising and will also cause a massive strain on our economy because interest rates won’t be going down,” economist Mike Schüssler said.

Electricity prices are also expected to go up this month.