More belt-tightening for consumers
Already cash-strapped consumers will have to dig deeper into their pockets as petrol, diesel and illuminating paraffin are set to increase by 75c, 93c and 76c respectively at midnight. This, coupled with the carbon tax (9c a litre), which comes into effect on June 1, is expected to add another 30c to the fuel levy, hitting the poor the hardest.
Toll fees have also increased across the country in the past week. From April, the general fuel levy will increase by 5c a litre, and the Road Accident Fund levy by 15c a litre. The weaker rand and rising oil price are to blame for the fuel price increase.
THE petrol price is set to rise at midnight.
“This will wreck consumers. They will need to pay more, not only for petrol. Other goods and services will also Increase because it becomes more expensive for businesses.
“For retailers, input costs will increase and they will need to pass that on to consumers,” Automobile Association spokesperson Layton Beard said.
Efficient Group chief economist Dawie Roodt said the rise in toll fees by Sanral, in addition to the fuel price hikes, would heavily affect all South Africans. “Most freight is now transported by road because of the total collapse of the freight rail network under the stewardship the Passenger Rail Agency of SA. Consumers will bear the brunt of this,” said Roodt.
Debt Rescue chief executive Neil Roots said the introduction of the carbon tax and the National Treasury’s refusal to align the country’s tax brackets with Inflation meant most taxpayers would end up paying more in taxes and spending less on essentials such as food and clothing. It is very likely that more motorists will skip paying toll fees because they have substantially less money to spend.” Roets added the reality was that some consumers had now been reduced to buying food on credit.
“While there is still substantial expenditure on luxuries, a growing number of deeply Indebted consumers are being pushed into a comer. With unemployment around 27%, key job sectors like mining are continuing to shed jobs at unprecedented rates in 2019. This is despite President Cyril Ramaphosa’s best efforts to turn the situation around,” he added.
Increases ‘to hurt poor and add to woes of cash-strapped consumers’
Cosatu spokesperson Sizwe Pamla said the fuel price increases were deeply disturbing.
“Already there are workers who are struggling to feed their families. This is a precarious situation. We may end up back in a recession.” Pamla added that workers had to spend more money on fuel, food and education, and many were losing their jobs because of the failing economy. The AA said the increases would hurt the poor and Increase the burden of all consumers.
It added that consumers currently paid R5.34 towards indirect taxes on every litre of petrol bought and R5.19 on every litre of diesel. This comprised R3.37 (petrol) and R3.22 (diesel) for the General Fuel Levy, R1.93 for the RAP levy (for petrol and diesel) and 4c for customs and
excise taxes (petrol and diesel). These levies would now increase by a combined 29c for petrol and 30c for diesel, which included a 9c and 10c addition for the carbon tax on petrol and diesel respectively. I Author: Se-anne Rall & Additional reporting by Yethu Dlantini