As we enter the second quarter of 2024 consumers in South Africa are still looking for different ways to make their rands stretch further every month.
This comes as the fuel price continues to increase, worsening the cost of living crisis in the country.
April now brings higher fuel costs for motorists, along with interest rates remaining elevated, and to further compound pressures for South Africans, Eskom implemented a more than 12% tariff increase on Tuesday.
Abigail Moyo, the spokesperson of the trade union Uasa, told “Business Report” on Wednesday that living expenses had become a nightmare for workers who were already bent over backwards to look after their families.
Moyo said: “The South African Reserve Bank’s decision to keep interest rates unchanged last week brought some relief, but rising fuel prices remain a burden as the ripple effect is felt in the prices of basic needs and services.
“Workers are also expected to pay more for electricity following Eskom’s more than 12% price increase. Uasa encourages its members and fellow South Africans to spend frugally, given these spiralling costs that are largely unavoidable.”
The South African Petroleum Retailers Association (Sapra) further rung alarm bells on Wednesday saying that the fuel price increases will impact households.
Lebo Ramolahloane, the vice-chairman of Sapra said: “Rising petrol prices have a ricochet effect on so many parts of the economy. They create additional strain on household budgets, reducing disposable income available for other expenses. On the commercial side, increased fuel costs can also raise operational expenses for businesses, particularly those reliant on transportation and those trading in fuel, which will impact profit margins.
“Fuel Retail outlets are also not exempt. The cost of stock plays a huge role for a service station. Fuel is primarily paid for upfront by retailers and an increase of however many cents per litre always translates into the cost of a tanker increasing and adding more cashflow strain on the business,” Ramolahloane added.
Most motorists also did not adjust their fuel expenditure according to the extra litres a fuel increase comes with.
“If, for example, a motorist is accustomed to always fuelling up with R500 of 95 Octane which in March was roughly 20 litres, with a new increased prices the motorist would have to pay an extra R2 to maintain 20 Litres of fuel dispensed, which doesn’t usually happen, hence the drop in sales volumes for the business and overall profits for the month. We will be watching the markets carefully, appreciating how fuel price trends impact both individual households and the broader South African economy, influencing spending habits, inflation rates, trade dynamics, and economic growth prospects, he further said.
Neil Roets, the CEO of Debt Rescue, told Business Report that the volley of living cost increases was a bad April Fool's joke on embattled South Africans.
Roets said, “Consumers are teetering on the verge of despair, and says it is unacceptable that two of the most vital basic necessities – petrol to drive their vehicles and electricity to heat food and keep the lights on – are slowly but surely being outpriced beyond the reach of the average citizen. The combined pressure of inflation and the relentless electricity and petrol price increases is decimating the disposable income of working South Africans, and already households are having to choose between eating a nutritious meal or paying for transport to get to work, school or college. The financial pressure will exacerbate the unbearable burden of indebtedness that is a daily reality for too many South Africans.”
BUSINESS REPORT