LAST week’s petrol price hike, a record high, rubs salt in the wound of overburdened consumers and will probably add to food and transport prices, experts say.
Motorists using petrol-pumped vehicles started paying R18.20 a litre for 95 unleaded petrol from Wednesday, while 93 unleaded petrol increased by 91 cents a litre and diesel by 55.58.
Wholesale illuminating paraffin went up by 50 cents a litre.
This time a year ago, petrol cost R15.17 cents a litre.
The Department of Mineral Resources and Energy said the movement in international refined petroleum product prices followed the increasing trend in crude oil prices.
The average brent crude oil price increased from $73 to $74 a barrel while the rand depreciated from R13.92 to R14.54 against the dollar during the period under review.
But what pushed the petrol price beyond the brink of affordability was the levy of R6.58c per litre implemented into the prices structures of petrol and diesel.
This week, economists said the significant fuel price increase would have a knock-on effect on prices across many major sectors of the economy.
This will add pressure on overburdened consumers.
Anchor Capital’s investment analyst Casey Delport said the recent petrol price increase would have a shortand long-term impact on consumer prices and household debt.
Delport said consumer prices might remain relatively muted for now as producers had mostly absorbed the price pressures thus far.
“However, with margins squeezed, they may yet pass these price increases on to consumers,” she said.
Delport, however, said households were saving less because they had to pay for day-to-day expenses, with debt to disposable income increasing from around 60 percent before 1994 to the current level of around 75 percent.
This essentially means that, on average, households spend three-quarters of their take-home pay on debt and have only a quarter of their salary to spend on everything else.
“This consequently has a huge impact on retirement and the reliance on government for welfare.” Delport said.
Spokesperson for the Uasa trade union Abigail Moyo said the increase in the fuel price was of concern, coming at the back of thousands of job losses due to the Covid-19 pandemic and the recent civil unrest.
Moyo said consumers could no longer afford the increases.
“We urge the government to make haste with the promised financial assistance for businesses and individuals,” Moyo said.
The Fuel Retailers Association of Southern Africa (FRA) warned that fuel prices were exerting pressure on compromised volumes in the fuel retail sector.
FRA chief executive Reggie Sibiya said the increase came after more than 90 service stations were looted and vandalised during last month’s unrest, with the estimated total loss and damages standing at almost R300 million.
“Most of those service stations are still not operational, as claiming insurance processes will still take their own time,” Sibiya said.
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