Food and transport expected to increase

Consumers bear brunt of fuel hikes

CONSUMERS are set to bear the brunt of huge fuel price hikes which came into effect on Wednesday, which will see the cost of food and transport increase.

The Department of Minerals and Energy announced that the petrol price would rise by 75 cents/ litre, while the two grades of diesel increase by 72.5 (0.05%) and 74.5 (0.005%) cents/ litre respectively.

South African National Taxi Council (Santaco) regional chairperson Mathula Mkhize said that with the recent fuel increases the taxi industry had no choice but to consider an increase in taxi fares.

“The leadership of Santaco normally announces its annual increase in taxi fares in July but, with the continuous increase in fuel prices, the leadership, both provincial and national, has decided that it will meet to discuss the issue.

“The fuel increase has had a severe impact on the taxi industry.”

Dr Siyabonga Madlala, executive chairperson of the South African Farmers Development Association, said the fuel price hikes were disastrous for farmers.

“The government needs to change the methodology they use to calculate fuel prices. Over the past two months alone, the petrol price has increased by R2 per litre with an additional hike of 75 cents per litre. This will definitely have negative consequences for our farmers.”

Madlala added that farmers had faced many challenges this year that were impacting on their pockets.

“Even if a farmer avoids the impact of the increase as part of harvesting costs by outsourcing harvesting, they will still incur these costs when ratooning their cane. Even if both harvesting and ratoon management are outsourced, these costs will catch up with the farmer when rates for 2022 are negotiated.

“Contractors will try to claw back their fuel-related losses.

Farmers are already suffering under the strain of the huge fertiliser price increase. This will directly increase the cost of agricultural inputs.”

Madlala added that the consumer would definitely feel the impact of the fuel price increases in higher food prices.

“It is inevitable that the costs incurred by farmers and logistics service providers will ultimately be passed on to the consumer.”

Professor Irrshad Kaseeram, the deputy dean of research at the University of Zululand’s Economics Department, said the price of fuel was directly linked to food prices, and low-income households would feel the impact of high food and transport prices.

“In South Africa the bulk of food is transported on the road and higher fuel prices will mean higher food prices. It is the households that have an income of R6 000 or less that will feel a major impact as their income is mostly split in two ways, food and transport, and they are already struggling to make ends meet.”

Abigail Moyo, spokesperson for the United Association of South Africa (UASA) union said the hefty fuel price increase had come just ahead of a critical period of the year when many people plan to travel home or to different holiday destinations.

“The latest price hikes will see workers in Gauteng and other inland provinces pay just over R20 per litre. Since the beginning of the year, fuel prices have increased 40% while workers received minimal or no salary increases, resulting in financial strain for motorists or taxi commuters.”

Gavin Kelly, CEO of the Road Freight Association, said the impact of fuel price increases would mean that the tariff rate that transporters charge to move goods would increase.

“The transporter will have to pass their costs to their clients and customers which means, at the end of the day, consumers will be paying more for goods on the shelf and for moving things around.”