Fuelling misery in SA

SPARE a thought for the average South African, especially the working class.

The rise in the cost of living is fast outstripping incomes, even for the relatively well off. Fuel went up last week with the hike taking us to the highest fuel price in this country's history, with an expectation of massive knock-on effects on the prices of other goods and services.

Transport is said to be the second biggest expenditure group in many households. Whether it is by car or expenditure on bus, train and taxi fares, any increase in the petrol price hits people’s pockets directly.

A large number of South Africans stay far away from their place of employment. For them to get to and from work they need transpiration which, in turn, needs fuel. When the price of fuel goes up, it goes without saying that transportation fares will go up.

But it won’t stop there. The knock-on effect will be felt on consumer prices, especially for goods and services that rely on transport to get to the intended consumer.

Already, the single biggest expenditure group is food - which must move from the farm to the consumer. So an increase in the fuel price will definitely see an increase in food prices.

The fuel price increase comes shortly after energy regulator Nersa announced an electricity price hike of at least 9.41%, which became effective from 1 April. The increase is well above inflation. When one takes into account that the 9.41% increase is in addition to the 4.4% tariff increase the National Energy Regulator of South Africa (Nersa) approved in October 2018 for Eskom to recover unforeseen costs going back to 2014, then the electricity price increase is effectively 13.8%.

For consumers picking up the Eskom tab over and above the fuel price increase, the cost of living is becoming unbearable.

Meanwhile, union bosses and even middle and high income earners are complaining that salary increases do not match the cost of living increases. Over and above the direct increases on fuel and electricity that are now becoming the norm, and their secondary effects on food prices, consumers are still trying to adjust to the VAT increase that was introduced last year.

One happens to know a number of established and emerging middle class families and they admit they are struggling to hold on as the continued increase in living expenses eats into the bit of extra cash they had managed to set aside.

Indeed, it is becoming extremely difficult for consumers to even consider saving when they are struggling to make ends meet.

For many people now, the top priority is putting food on the table first. Citizens are struggling to juggle their various financial commitments and, with new price increases every now and then, it just becomes impossible to cope.

No doubt, the pressure experienced by many is going to force them to consider additional debt in order to get by.

Clearly, we have a crisis in our hands. South Africa needs an economic recovery plan, one that will have meaningful impact on lessening the burden on ordinary citizens. Ordinary citizens can no longer cope.


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