‘Prepare for tough times’ – economists on latest fuel hikes

By: Val van der Walt

While there’s no doubt motorists welcome the government’s decision to extend fuel relief in the form of a reduced General Fuel Levy (GFL) in June and July, these massive increases are still going to hurt consumers and the economy, according to leading economists Neil Roets and Dawie Roodt.


Debt Rescue chief executive Neil Roets said the latest hike takes increases in the petrol price over the past 12 months to 41.5% – and all indications are that prices will continue rising in the months to come.

‘Enough is enough,’ said Roets.

At a time when 88% of households have had to cut sharply on basic goods and services to manage their increased living costs, people simply cannot absorb anymore bad news with regard to food security.

“Now they have to contend with concerns related to the food transport networks – and whether the nutritious foods they need to keep their families healthy and well will even make it to their corner of the country – let alone how it will add to the astronomical price of basic foodstuffs,’ he added

Economist Dawie Roodt said the increase is a result of factors completely out of the country’s control, such as the global oil price, and a volatile rand.

He said the price of fertiliser has also increased sharply. and that all of this will lead to another significant hike in food prices that will see people going hungry.

The reality is that there is a worldwide increase in the prices of goods and services. especially energy and food prices, leading to a rise in inflation globally and here at home, forcing central banks to increase interest rates.

All this means economic growth will be lower than projected, and that will result in more poverty and unemployment

“We are in for a difficult few months, perhaps even years,’ Roodt said.

The implications of this, according to Roets, will penetrate every aspect of our lives, with knock-on effects almost too catastrophic to imagine-‘and this comes at a time when SA citizens have reached breaking point and can no longer withstand the volley of the never-ending fuel, electricity and interest rate increases – especially as salaries are not being adjusted in line with inflation, said Roets.

‘If this does not topple SA citizens over into a personal state of disaster, I will be very surprised.

It is deeply distressing to see the impact of the rising living costs on families, especially when it comes to core staple foods, which are fast disappearing from the table for millions of people.

“Now an even more frightening scenario is unfolding, with the impact of this latest price hike set to heavily affect food transport networks,’ Roets said.

Also commenting on the latest fuel hikes, Gavin Kelly, CEO of The Road Freight Association, said this will have an impact on every single item that is transported to and across SA

“No one would have thought we would see such increases in the fuel price as we have experienced over the past six months.

oil remains above the $120 per barrel mark, while the rand remains volatile, trading in the R16/$ range, and the effect is a sky-rocketing price for fuel in SA’ said Kelly.


The ANC government, which loads 33% in taxes and levies onto the fuel price, is taxing SA into poverty, according to the DA.

The party proposes the following:

• Extend the temporary relief on the fuel levy, currently R1.50 per litre

• Better still, scrap the fuel levy entirely, saving R3.93 per litre

• Allow drivers out of the unnecessary R2.18 Road Accident Levy

• Deregulate the fuel price immediately, so competition can drive down prices.



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