Durban - If you are struggling to make ends meet, brace yourself for even more difficult times ahead.
In about two weeks’ time, petrol prices - which are already at record highs - are expected to increase by another 30-odd cents. This is likely to push up the price of a litre of petrol to R16 in some areas. The result is likely to be higher food prices.
But that is not all. From July, eThekwini will raise utility costs. That means rates will go up as will services like electricity, water, sewage and refuse.
Rates and services will increase by 6.84% for electricity; 15% for water (domestic); 15.5% for business; 9.9% for refuse removal; 9.9% for sanitation and 6.9% for rates.
Taxi commuters will also feel the pinch from July 1 when fares go up by R1. However, Boy Zondi, the KwaZulu-Natal chairman of the South African National Taxi Association, said it was their resolution to increase taxi fares once a year and so the petrol increases had not caused the R1 annual increase in taxi fares.
“We don’t look at how many times petrol has increased in a year. Unfortunately this is the reality which we have to face, and it’s not going to sit well with people in the taxi industry and commuters,” Zondi said.
Quinton Christian, a taxi operator between the Durban city centre and Wentworth, said their frustration lay in the large monthly payments they made for their vehicles.
He said since the government had introduced the new taxis and phased out the old ones a few years ago their monthly instalments were “ridiculously” high.
He said 10 years ago they paid R240000 for these vehicles but the price had doubled to R440000, with monthly repayments of R14 000.
“At some point commuters will realise that a huge chunk of their wages or salary goes into taxi fares and the reaction will not be nice.
“We move 68% of the workforce around the country but we don’t get subsidised by the government. But Prasa and SAA get billions in bailouts from time to time,” Christian said.
Economists have warned consumers to spend wisely because there is no sign of things getting better in the short term.
John Manyike, an economist and the head of financial education at Old Mutual, said these were “confusing” economic times.
He said that when VAT went up from 14% to 15% in April this year, everything became more expensive.
Manyike said that according to figures released in December last year, there were about 25 million consumers countrywide who were credit-active.
He said consumers should borrow responsibly and try to reduce their debt as much as possible. He also suggested that people opt for zero-rated (VAT exempted) groceries such as brown bread, dried mealies, dried beans, lentils, canned pilchards, rice, fresh fruit and vegetables.
“Understand what’s happening in the economy because every change will affect you in some way or another, so adapt your budget accordingly,” he said. “Cut back on things you can do without. Review your loyalty to expensive brands and stores, and worry less about keeping up with the Kardashians and the Dlaminis. You work hard for your income, but it is your responsibility and no one else’s to protect it and use it wisely,” Manyike said.
Economist Dawie Roodt said the South African economy was a concern in an environment where unemployment levels were already high.
“Inflation will keep on going up and we are likely to see an increase in poverty for the next two years. This problem requires solid political leadership and, unfortunately, the current president doesn’t have a solid support base.
“Consumers need to make sure they have a financial plan and be conservative in their spending,” Roodt said.