CASH-STRAPPED South Africans can take a breather today as fuel prices decrease, easing the cost of living. Meshel Muzuva, a senior finance and economics lecturer at private higher education institution Mancosa, said yesterday the impact of the decrease in the price of paraffin would result in poorer households witnessing decrease in their cost of living.
Consumers would also benefit from the lower prices of transport and fuel, which would effectively increase their disposable income and enable them to spend more on other goods. Muzuva said international petroleum prices had been stable, which allowed the rand to leverage its recent strength.
“This has led to a lower contribution to the basic fuel prices on petrol, diesel and illuminating paraffin. The fuel price decrease will bring some relief to cash-strapped South Africans. Financially burdened South African consumers can thus expect a breather in May from the series of fuel price increases earlier in the year, and users of paraffin will be delighted with the news, as we are approaching cold winter months,” Muzuva said.
Announcing the adjustment of fuel prices, based on local and international factors, with effect from today, Minister of Mineral Resources and Energy Gwede Mantashe said the rand appreciated slightly, on average, against the dollar from R14.95 to R14.22 during the period under review compared to the previous one.
This had led to lower contributions to the basic prices of petrol, diesel and illuminating paraffin by 26.30 cents per litre (c/I), 24.20c/1 and 22.22c/I, respectively. The price of petrol declined by 8c/1 and diesel decreased by 31 c/l. The price of illuminating paraffin decreased by 30c/1.
Trade union Uasa spokesperson Abigail Moyo said the fuel price decrease would bring relief for workers who had fallen victim to the steep fuel price hikes of the past four months.
“As winter approaches, workers who depend on paraffin and gas for household use, like cooking and heating, will find it easier to keep warm. Uasa encourages members and other South Africans to use the money saved on fuel towards other household needs,” said Moyo.
The steep petrol hikes of the past four months led to South Africans experiencing higher living costs, which resulted in consumers taking on more credit to make ends meet. The latest research from the National Credit Regulator noted that cash-strapped consumers turned to credit to help manage their finances, but it was a concern that almost 50 percent of the accounts of the country’s 27 million credit-active consumers were in arrears.
Last month, Debt Rescue chief executive Neil Roets warned that over-indebtedness remained sky-high, and more consumers were finding themselves in a challenging financial situation.
“Levels of distress are also likely to increase as we see the real, longer-term impact of Covid-19 and its subsequent lockdowns on consumers, and as consumers return from their holidays with less money in their bank accounts to manage their financial obligations,’ said Roets.