Fuel price increases will force South Africans to stay home

The incessant fuel price increases will force millions of South Africans to stay home this summer and cancel any road trips they had planned.

The third consecutive increase in the fuel price has pushed the price of all fuel grades above the R25 a litre mark leaving little room for cash-strapped consumers to manoeuvre.

The department of mineral resources and energy says the increase is due to rising international oil prices as the key contributor, with the price of Brent crude oil breaching $90 per barrel this month for the first time since October last year. The department also says a slate levy of around 30 cents was implemented, which contributed to the unexpectedly steep increase.

The Central Energy Fund’s recent data shows that in the case of petrol, up to 80% of the increase can be attributed to higher oil prices, which are also responsible for up to 86% of the expected climb in the price of diesel.

“The main driver behind the higher oil prices at the moment is the artificial supply constraints implemented by oil-producing nations (OPEC) and Russia’s ban on the sale of all types of diesel fuel to all countries,” Neil Roets, CEO of Debt Rescue, says.

A Bloomberg analysis shows that oil futures are set for their biggest quarterly jump since 2022 due to these constraints, with forecasts pointing to a shortfall of as many as 3 million barrels a day in October.

ALSO READ: Empty pockets ahead: Petrol price hike a blow to SA’s ailing economy

All grades of fuel now cost more than R25 per litre

With the latest petrol price hikes, motorists will pay R25.68 per litre for 95 unleaded petrol and R25.22 for 93 unleaded, while commuters will undoubtedly be hit with yet another steep hike in taxi and bus fares.

“The long and the short of it is that hard-working citizens who have been looking forward to their end-of-year vacation will now have to think long and hard about whether their budget can accommodate any kind of road trip whatsoever, as fuel prices continue to soar,” says Roets.

“Authorities predict more fuel price increases in the coming months and this dashes any hope of any kind of reprieve from the relentless financial pressure,” he adds.

The Automobile Association says it remains concerning that, in the face of these increases, government remains silent on its plans, if there are any, on a way forward to deal more effectively with fuel price increases.

Roets agrees and warns that this latest fuel price increase will push people to the point of no return, where they are no longer able to enjoy even the simple pleasure of connecting with friends and family once a year.

“At this point, each cost-of-living increase places an ever-growing slice of life out of reach for millions of South Africans and many of them are no longer able to afford even the basic necessities, like three square meals a day.  We need our government to take a stand,” he says. 

Congress of South African Trade Unions (Cosatu) acting national spokesperson Matthew Parks said the working class would be the most affected by the latest price hike.

“It may spur inflation, which has been falling and nudge the Reserve Bank to increase the repo rate once again.”

“Thousands of consumers are turning to credit to make ends meet and it is deeply concerning that we continue to see a marked increase in people defaulting on their debt, which has prompted some of the major banks to cut back on lending,” says Roets.  

 “With no way to dig themselves out of their financial predicament, people are falling into a deep hole they cannot easily climb out of. My advice to those who are in a debt trap is to seek help from a registered debt counsellor who can assist you to manage your financial predicament.”