Cost of living rich and poor

This week thousands the increasingly must cash-strapped around a very worrying

African government to call for an immediate end to the invasion of Ukraine by Russia.

Instead, the stance of South African unions regarding the conflict in Ukraine has been ambiguous. In May, the Saftu congress adopted a resolution opposing “imperialist war” and standing in solidarity with “Russian and Ukrainian workers”, but without ever explicitly condemning Russia. Cosatu’s top body, meeting in the same month, similarly asserted that “war cannot be condoned”, without explicitly criticising the Russian invasion.

Individual unions, meanwhile, have taken more pro-Russian stances. The National Union of Metalworkers (Numsa), for instance, in July described the conflict in Ukraine as being led by “the Empire of the United States of America”.

While economists say there are many complex reasons behind the cost of living crisis, including the ongoing impact of disrupted global supply chains caused by Covid-19, there is agreement on one point: Russia’s invasion has directly and indirectly driven up fuel and food costs around the world.

To give one example, South African consumers seeking to understand why their cooking oil is 45% more expensive than at this time last year – according to Nielsen IQ – should look partly to the fact that both Ukraine and Russia are among the world’s top oilseed exporters.

Good news ahead for the petrol price

One of the immediate effects of the war in Ukraine was a spike in petrol and diesel prices globally, as a result of Russia being a major producer of the world’s oil.

The petrol price increase has been passed on to local consumers with painful results: Vavi estimated this week that the average minibus-taxi user in South Africa is now paying about R168 more for their daily commute than they were last year. Taxi fares are currently consuming more than a third of minimum-wage workers’ salaries.

But in recent weeks a drop in the price of Brent Crude oil has brought some relief, which is mercifully likely to continue at local petrol pumps. DM168’s Ray Mahlaka has reported that the petrol price could drop by as much as R2.60 a litre in early September.

What will be critical is ensuring that these petrol savings are reflected in adjusted taxi prices. When prices drop, the reality is that local consumers do not always experience the benefits they should. This is currently a concern when it comes to the cost of groceries.

Are our food prices higher than they have to be?

The Competition Commission is currently investigating food prices to determine