With fuel prices expected to soar to record highs in a few weeks, consumers have been warned to brace for tougher times ahead with spike in food prices and an increase in public transport cost.
Global crude oil prices, the Ukraine-Russia conflict and OPEC's decision to limit supply since the start of the Covid-19 pandemic has been cited by experts as the contributing factors to the rise in fuel prices.
The Department of Mineral Resources and Energy had warned that if the conflict in eastern Europe was not resolved by the end of April, South Africa would face tough decisions including the rationing at the fuel pumps.
However, Deputy Director General Tseliso Maqubela stressed that the measure would be the last resort. But would be considered if the Ukraine-Russia situation remained unresolved by the end of next month.
"If the situation deteriorates, restrictions on how many litres of fuel each motorist is allowed to buy per visit to a fuel station might be considered, to say 50 litres. But diplomatic efforts to resolve the (Ukraine-Russia) situation are beginning to gather momentum.
"There's a shortage of crude oil supplies. Increases of fuel in excess of R2 per litre must be expected during this period," Maqubela told the parliamentary portfolio committee on minerals and energy.
He said the department was assured by the petroleum body, South African Petroleum Industry Association (SAPIA) that the country's fuel situation was fine for March and April.
Food prices, including staples such as bread, margarine and sunflower oil were expected to rise, experts warned.
"Food prices have been increased massively over the past year and now this situation is bound to have a greater impact and we should begin to see these increases over the next month to six weeks," said the Programme Coordinator of the Pietermartizburg based Economic Justice and Dignity Group (PMBEJD), Mervyn Abrahams.
The Automobile Association (AA) said another fuel price increase was expected in April, delivering yet another blow to already embattled consumers.
AA said the data was projecting fuel prices to rise to R24 per litre for petrol and R23.60 for diesel.
The data suggested that 95 octane petrol was set to increase by R2.15 per litre, 93 octane by R2.07 per litre, diesel by between R2.94 and R3.08 per litre and illuminating paraffin by R2.51 per litre.
Already some public transport have implemented fare increases with Golden Arrow Bus fares going up by 8 % on Monday.
Golden Arrow also cautioned that further increases might "become necessary as the year progresses".
The Cape Amalgamated Taxi Association (CATA) said as of April 1 some of its member associations would increase fares by between R1 and R3 on certain and by R10 on inter-municipal routes.
CATA Spokesperson Mandla Hermanus the taxi associations could no longer absorb the rising fuel prices as some associations had not implemented a price increase in December.
SANTACO said a decision on whether to increase fares would be taken at a meeting scheduled to take place next week while the Congress of Democratic Taxi Associations (CODETA) said it would not increase fares on its routes.
"Even though the taxi industry is not subsidised by the government we have to be considerate towards the passengers," said CODETA Spokesperson Andile Khanyi.
In February, the average cost of the household food basket was R4 345 which reflected an 8.9% or R354 increase year on year.
The PMBEJD's Household Affordability Index tracks food price data from 41 supermarkets and 30 butcheries in some of the country's townships including Khayelitsha, Gugulethu, Philippi, Langa, Delft and Dunoon.
Abrahams warned that the poor would be the hardest hit by the fuel price increases as it would lead to food price hikes as South Africa imported wheat and maize from the two Eastern European countries.
"The rising fuel prices will have a double blow effect on consumers, particularly low income households. Not only will they spend their income on increased public transport fares, but they will also spend more on food," said Abrahams.
He said the price of wheat products including flour, bread, pasta, and cereals were also likely to go up as well as cooking oil.
Abrahams said between February 2021 to February 2022 the price of 25 loaves of white bread for a family of seven rose by 3 % from R333 97 to R345 09 and brown bread from R304 13 to R313 41 even outside of the Ukraine-Russia situation.
The price of a 5L cooking also rose within the same period by 35 % from R108 to R146 and a 1kg tub of margarine has increased by 17%.
Abrahams said in Durban the spike in the price of cooking oil in that period was alarming with some small retailers selling a 5L for close to R200.
He said with the impending food prices the Competition Commission would have to look into possible price gouging on existing products, particularly on cooking oil.
"We've seen panic buying of cooking oil already in and around Durban," and urged the country to build resilience for households and the economy to cope with external problems.
"We need to move our food logistics to rail to lessen the risk and to incentivise urban agriculture for food security," said Abrahams.
Economist Dawie Scholtz also warned that if the situation in Ukraine did not improve it might result in further fuel increases.
He said there was no need for fuel rationing at any stage and the solution was to increase the price.
"The answer to a shortage in anything is that the price must go up. Rationing is a bad idea, It damages the economy," Scholtz said.
Scholtz said he didn't foresee any fuel shortages as these only occurred when "politicians interfered with the market mechanism".
Maqubela said interventions under consideration included encouraging working from home, enabling the exploration of hydrocarbons to take place so the country can produce its own oil and investing in local refining.
The joint owners of SAPREF, the country's leading refinery that's facing a possible closure, said they were considering various options and would provide further updates when decisions on next steps had been made.
But according to Maqubela, the refinery was still operating and receiving crude oil.
Enref suspended production after a massive fire incident in 2020 and it was not clear when operations at Astron refinery would resume after they were also suspended in 2020 following a fire.