On Wednesday, both grades of petrol increased by between R1.08 (for 93 Unleaded) and R1.14 (95 Unleaded), while diesel increased by between R1.93 (low-sulphur 50ppm) and R1.96 (500ppm).
Don Mthethwa, 4 October 2023
The economy remains firmly in ‘muddle-along’ mode, unable to gain sustainable momentum and the monetary policy stance is already sufficiently restrictive for the current state of growth and inflation.
On Tuesday, 3 October 2023, South Africa’s fuel prices increased to R1.11 a litre on both grades of petrol increased by between R1.08 (for 93 Unleaded) and R1.14 (95 Unleaded), while diesel increased by between R1.93 (low-sulphur 50ppm) and R1.96 (500ppm), posing a staggering impact against food costs. This further fragments a calculative real-life scenario for the ordinary citizen that reflects between R6.04 and R6.18 from every R25 per litre purchase contributed towards the General Fuel Levy and Road Accident Fund Levy.
When considering these factors, higher fuel prices increase the cost of production and transportation of food which is later transmitted to consumers, particularly for staple foods such as maize meal, wheat and its products such as bread, and oilseeds. The reason for this is because the majority of these commodities in South Africa are transported largely by road and thus sensitive to fuel-price changes.
EWN reports that with a crippling fuel price hike in place for the month of October, unions and political parties say consumers will now be forced to choose between putting food on the table and spending a significant amount of their income on transport.
Ripple effect on small businesses
Various factors considered to be impacted by these price hikes will have a ripple effect on small businesses – on operational costs, cost of sales and overhead costs in particular. This is an extremely serious matter given that a number of small businesses have succumbed to the financial strains imposed by load-shedding. Though the ripple effect may not be clearly visible now, it must be noted that there is a prospect that there will be a decline in businesses in sectors involving Agriculture, Transport, Insurance and lately, the controversial market of Spaza shops that are sanguine about prospects for a developing township economy.