Lisa Isaacs
Consumers face more strain on their pockets as another fuel price hike comes into effect this week, and food prices continue to climb.
Economists warned that this is the start of the effects South Africans will feel from the recent drought and depreciating rand.
The Department of Energy announced yesterday a fuel price adjustment for this month, which would have the price of 95 and 93 octane petrol increase by 12 cents per litre tonight at midnight.
In a statement, the department said diesel would decrease by one cent per litre, the price of paraffin would drop by nine cents per litre, and liquefied petroleum gas would decrease by five cents per kilogram.
The department said the main reasons for the adjustments were the average increase in the prices of petroleum products on the international markets, and the strengthening of the rand against the US dollar during the period under review, which cushioned the price adjustments.
Petrol prices increased more significantly than diesel due to higher demand for petrol in the US and Europe as they moved towards their summer, the department said.
Meanwhile, the latest National Agricultural Marketing Council (NAMC) bread basket estimates show that from March 2015 to March this year, the cost of a basic 22-item food basket increased by about R70 (13.88 percent) from R509 to R579.
NAMC monitors food prices at retail level and releases regular reports. Its estimation takes into account 22 essential items including apples, brick margarine, baked beans, chicken portions, a loaf of white bread, maize meal and onions.
The bread basket estimates in March showed an increase of approximately R56 and, in February, an increase of approximately R44.
The report also shows that in March the consumer price index (CPI) released by Statistics SA showed the overall inflation rate is 6.3 and 9.5 percent for food and non-alcoholic beverages, compared to 7 and 8.6 percent respectively in February.
Chief economist and director at Econometrix Azar Jammine said consumers should continue to tighten their belts.
Despite the looming increases, he said the fuel price hike will still be lower than increases faced this time last year, but urged consumers to watch their expenses.
“We still haven’t seen the full effect of the drought pushing up food prices. When we look at salary increases, we will struggle to keep up with these increases and the cost of living. It will also take a while to feel the effects of the rand’s depreciation,” he said.
In months to come, consumers will see increases in commodities such as vehicles and imported appliances, he added.
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