Price rise domino effect hits SA

RUSSIA’S invasion of Ukraine has had a ripple effect on South Africa’s economy.

This week, Grades 93 and 95 petrol increased by R1.46 a litre, while diesel increased by between R1.44 and R1.48 a litre.

Layton Beard, the spokesperson for the Automobile Association, attributed the hike to rising international petroleum prices following the Ukraine invasion.

He said depending on Russia’s military actions, the price could increase again next month

“One silver lining, though, is that any potential increases will not be combined with increases to fuel taxes, as the minister of finance announced the General Fuel and Road Accident Fund levies would not increase this year,” said Beard.

Mervyn Abrahams, the spokesperson for the Pietermaritzburg Economic Justice and Dignity Group, said the spike in fuel would have a domino effect on the price of food.

“Farmers need petrol and diesel to plough their fields. They need fuel to transport their food. Once the input costs increase, the manufacturers will then increase the price of goods, which will then impact on the consumer.”

He said Ukraine and Russia were also major wheat exporters to Africa. It is believed about 90% of imported agricultural products were wheat, while a significant amount of sunflower oil and seed were also imported.

“Wheat is part of flour, bread and even breakfast cereals. So if there are no wheat imports, South Africans could see price hikes in wheat products.”

South Africans will also have to deal with increases in electricity tariffs and tolls. The National Energy Regulator of SA has agreed to a 9.61% increase from April. Eskom initially requested 20.50%.

Meanwhile, the South African National Roads Agency SOC Limited (Sanral) announced a 5% increase in tolls as of Tuesday.

Vusi Mona, Sanral’s spokesperson, said the tariffs were as per Statistics South Africa’s Consumer Price Index.

“We are counting on the public to support us in this endeavour because without this key alternative source of funding, we would not be able to carry out some of our major works,” Mona said.

Dawie Roodt, an economist, said while there were significant increases in the country, South Africans should not become despondent.

“At this stage, we don’t know what is going to happen between Russia and Ukraine.”

He said while there could be a negative impact that results in the world economy dipping into recession, it could be good if investors turned to SA.

“Maybe there is an opportunity for SA in the sense that our financial market is very liquid and very well managed.

“The rest of the world might look at SA and say ‘let me invest my money here’.”