Consumers warned to start saving for worse times ahead

Experts have warned the winter cold could add to the strain caused by fuel price rises and suggest consumers start saving to survive the crunch.

This followed the extension of the temporary reduction in the fuel levy by government hours before the monthly price hike was due at midnight.

The relief kept the general fuel levy cut by R1.50 per litre for June and 75c/l in July before the full levy of R3.85/l resumes in August.

Organisation Undoing Tax Abuse (Outa) CEO Wayne Duvenage said motorists, commuters, businesses and the economy desperately needed the relief.

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“This extension will help restrict the increase in the fuel price, which increases to R24.17/l for 95 octane inland, instead of to R25.67/l,” Duvenage said.

Duvenage said Outa wrote to Minister of Finance Enoch Godongwana in May, calling for the reduced levy to be retained beyond May, due to the negative effect of high fuel prices on both individuals and the broader economy.

“We suggested the temporary fuel levy reduction withdrawn for a phased-in recovery over two or three months would be a better option,” he said.

Economist Dawie Roodt said Godongwana’s decision to extend the relief was a problem.

“All taxes are bad, the fuel tax was better than other taxes but the real problem was the government was giving out too much money. That’s the only reason we are paying such hefty taxes,” he said.

Roodt said the inflation rate and food prices will also rise in coming months.

“Some food prices have already started to rise and will rise even more,” he said.

Roodt said the best thing to do was to start putting money aside for unforeseen circumstances and saving a nest egg for the day things start getting worse.

“There are difficult times ahead, so much so I worry about social unrest.”

MasterDrive CEO Eugene Herbert said if you have not yet filled up your fuel tank, you missed your chance to evade the price increase.

Herbert added the price may not improve soon with current world events.

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“Projections for the fuel price hike this month were already over R1 a litre even before the Russia-Ukraine conflict.

“As the conflict developed and sanctions were implemented, one of the biggest negative impacts expected was on fuel prices. Russia is the third-largest oil producer, accounting for more than 12% of global crude oil production.”

Herbert added South Africa was heading into the coldest months of the year and a dip in temperatures could also reduce a vehicle’s fuel efficiency.

Pauline Kemp Britz said she was fortunate to work from home which saved a lot of petrol.

“We will also be planning our trips and drive as little as possible to save on fuel,” she said.

They were going to use online shopping and delivery services.

Inflation remains at 5.9% in April, with food and transport costs causing concern