Durban - Independent economist says the re-imposition of sanctions by the United States of America against Iran is going to have a negative impact on South African consumers.
Dawie Roodt, independent economist, said it was likely that the price of fuel in June could spike at its highest level ever. Roodt said he expects the hike in petrol price would be around 80 cents a litre with diesel spiking at over 90 cents a litre.
“While the rand is remaining relatively stable right at the moment there is every likelihood of some volatility creeping in if President Cyril Ramaphosa is unable to settle the unstable situation the North West province where former premier Supra Mahumapelo still seems to be hanging on to his position by proxy,” Roodt said.
He said there could be other hikes in the price of crude oil because of possible supply shortages when US sanctions against Iran take effect.
“Nobody knows exactly what the full range and scope of US sanctions are going to be but coming on top of added tariffs against South African steel and aluminium, it is clear that the United States has South Africa in its sights as one of the countries that has persistently been voting against it in the United Nations,” he said.
Neil Roets, CEO of Debt Rescue, said the hike in fuel price will be bad for consumers.
“We can see from the record number of petitioners coming to us to seek relief from their massive debts by going under debt review, that they are at the end of their tether. Any further increases in their cost of living is going to result in people going hungry – something which we’ve rarely seen in this country before,” Roets said.
He said that the government would have to do more with less because there is no money which is needed for social grants, education and health.
“In the absence of hardly anybody having gone to jail for ripping off taxpayers in the Gupta scandal and the many other acts of grand larceny that have been widely reported, it is difficult to believe that our new presidency is going to materially improve our economic situation in the short term,” he said.
“We know from bitter experience that when the fuel price spikes, the cost of pretty much all other goods and service increase as well because of South Africa’s heavy reliance on road transport,” he continued.