File picture: Brendan Magaar/African News Agency (ANA)
File picture: Brendan Magaar/African News Agency (ANA)

’People are left with the bare bones’ as food, fuel and electricity price hikes bite

By Tshego Lepule Time of article published Feb 28, 2021

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Cape Town - Cash-strapped consumers face tough times as food prices increase, petrol prices rise and a looming hike in the cost of electricity is on the cards.

Minister of Finance Tito Mboweni’s Budget speech this week was met with scepticism and did little to provide significant relief for struggling consumers who have to deal with the following additional costs:

  • A 15% tariff hike to electricity prices in April.
  • A 27c per litre increase in fuel levies as of April 7.
  • Another petrol price increase in March.
  • And increasing food prices.

According to the latest Household Affordability Index report that closely examines the prices of a basic food baskets due, to be released by the Pietermaritzburg Economic Dignity Group this week, the cost of basic items has increased by nearly R150 over the last six months.

The average household basket stood at R4001.17, down from January’s figure of R4051.19.

While figures for February saw a slight decrease from January’s total cost of a basket, researchers warn the decrease is not significant enough to provide real relief for consumers.

“There was a decrease of about R50 but February is generally a bad month to base future predictions given how prices tend to go down slightly. And now with the fuel price hike and the electricity price that is going up by 15%, this will also have an impact on future food prices,” said the organisation’s Julie Smith.

“What is happening is that we see all these entities hiking up prices but the consumer’s wages have either remained the same or have been reduced. This leaves consumers on their own who are told to tighten their belts but there is nowhere else to cut costs, people are left with the bare bones.

“When women cannot afford to cut back on transport fees for children to school or for them to go to work, on burial societies, school fees, the only budget that is within their control is for food, where you see essential items being cut back.”

And with recent unemployment figures showing that the number of jobless people grew by more 700 000 to 7.2 million in the last quarter of 2020, concerns on the ability of South Africans to put food on the table continue to grow. Speaking at a conference held by the Department of Higher Education, Training and Technology on dispelling myths around Covid-19 and the vaccine, Dr Priscilla Reddy from the Human Sciences Research Council highlighted the socio-economic impact of the pandemic on households.

“We know that 7.2 million people in the last quarter have been left unemployed, we also know there has been a loss of income that has increased, salaries have taken cuts both for paid and unpaid workers,” she said.

“Almost one in four people said they did not have enough money for food, during the first stages of lockdown in April, 2020, we know that has increased, 16% of households reported that their children were hungry in November to December.”

Economist Mike Schussler said while there was relief for taxpayers in the form of personal income tax brackets, the increase of the petrol levy has a ripple effect that affects consumers.

“The above inflation increase to the fuel levy means those who need cars to get to work will be paying more at the pump and those who use public transport are likely to see increases there too,” he added.

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