State intervention is crucial to shield us from soaring prices
We are living in a global village. The conflict between Ukraine and Russia is impacting all of us, particularly socalled Third World nations like ours. We have seen volatility in markets around the world. This is on the back of the world trying to recover from the pandemic that has caused great damage in all our lives.
We are now being hit by a fuel crisis that is threatening to destroy the green shoots of recovery that were beginning to emerge. The cost of living is fast outstripping incomes, even for the relatively well-off. Fuel already went up this month and it is predicted that the hike next month will take the price to the highest it has ever been in SA, which would have dramatic knock-on effects on prices of other goods and services.
Transport — be it private vehicles or buses, trains and taxis — is said to be the second-biggest expenditure item in many households. So any increase in the petrol price hits people’s pockets directly. Many South Africans reside far from the place of their employment. For them to get to and from work they need transport, which in turn depends on fuel.
Most economists agree that our government must intervene urgently to soften the impact of the soaring fuel price. Failure to do so will spell disaster for many households, especially the most vulnerable in our society. Our government simply cannot afford to ignore this danger.
I fully support the call by some economists for our government to urgently suspend the fuel levies. The knock-on effect, especially for goods and services that rely on transport, will be felt by the consumer. The biggest expenditure item is food, which has to be moved from the farmer to the consumer. So an increase in the fuel price will definitely see an increase in food prices.
Research from the Pietermaritzburg Economic Justice & Dignity Group found that food price inflation for poorer households in SA has been 10% over the past year — double the headline consumer price index of about 5%. More and more South African households are getting poorer as food prices and the general cost of living continue to rise.
The poverty statistics also show us that more and more people live below the breadline — a worrying sign that every South African should take note of. Women and children are the hardest hit and bear the brunt of poverty. The fuel price increase comes shortly after the national energy regulator approved an electricity price increase of 9.61% for Eskom.
South Africans are suffocating under these increases — sooner or later people will be battling to survive, and then we will have said goodbye to our economic recovery plan because if people don’t have money to spend, the economy suffers. That is simple logic.
Indeed, it is becoming extremely difficult for consumers to even consider saving when they are struggling to make ends meet. Unfortunately, this becomes a vicious cycle. For many people, the top priority is now to put food on the table. With these continual price increases, it just becomes impossible to cope.
I fully support the call for our government to urgently suspend the fuel levies
The increases are pushing the poorest of the poor to the back of the queue. When petrol, diesel and paraffin go up, it affects the prices of all the basics people need to function — transport, bread, milk and fruit. While we are grateful to the government for the R350 Covid social relief of distress grant, it has been swallowed up by the tsunami of price hikes and no longer has any meaningful or positive impact on people’s pockets.
These increases are also destroying the capacity of the middle class and the working class to support our economy with their buying power and job creation. Small businesses are closing in huge numbers in the townships, where the government is trying to build the economy.
The government must urgently find ways to cushion our people from the rising cost of living. The data shows the incidence of anxiety, depression and suicide is climbing; people feel like they are drowning and cannot take care of themselves and their families. We cannot afford to sit back and watch people suffer.