Cape Town – The petrol increase is the final nail in the coffin for consumers following the activation of e-tolls and a warning of a possible taxi fare hike, according to experts.
The price of both grades of petrol increased by 17 cents a litre (c/l) and diesel by 10.12 c/l at midnight on Tuesday
Tuesday also marked the beginning of the electronic and cross-border collection of toll fees in Gauteng.
Efficient Group chief economist Dawie Roodt told Fin24 that the petrol price increase is a result of a weak currency and high international oil prices.
“The rand is making our lives difficult and international oil prices have been up in the last couple of weeks.”
He said consumers have been facing strain because the economy has performed dismally in 2013.
Pressure on the pocket
“It has probably been the most difficult year for consumers since 2007/8 and the petrol increase is the final nail in the coffin for consumers.”
He said the petrol increase and e-toll tariffs come on top of a number of other hikes throughout the year such as electricity.
“Retail sales are already slowing down and that is a sign that consumers are under pressure,” said Roodt.
He also predicted a mute period for Christmas sales and another petrol hike for January.
Debt Rescue CEO Neil Roets told Fin24 that the petrol price increase and e-toll system will have a devastating effect on consumers.
Poor hardest hit
He warned that this will mostly affect the middle class and lower income groups.
“These price hikes will not only cause transportation to be more expensive, but the prices of goods and services are also likely to increase.”
“It will also in all probability cause taxi fees to increase, as taxi owners will have bigger expenses to cover,” said Roets.
“The combination of these price hikes will have a very negative impact on the finances of South African households, especially with the festive season underway as people tend to spend more money during this time.”
He suggested that consumers draw up a budget which they can stick to during these times and they should distinguish between what they want and what they actually need.
Taxi fee hikes
The National Taxi Alliance (NTA) announced that e-tolls could push up the prices of taxi fares, according to Sapa.
Although taxis would not pay e-tolls, almost 80% of Gauteng’s taxis did not have permits, said NTA spokesperson Theo Malele.
“About 50% of those permits are lying with the permits board,” he said.