The announcement earlier today by the Department of Energy that the pump price of petrol will rise by 52 cents a litre (c/l) for all grades, while diesel will increase by a whopping 76c/l, is another serious blow to cash strapped workers and consumers in general. With winter on our doorstep, the increase in the price of LP gas by  98 cents per kilogram is yet another serious blow.

Understanding that the main reasons for the hefty fuel price hike are the continued upward march of international petroleum prices and the weakening rand/US dollar exchange rate, provides very little consolation for workers and consumers who will have less disposable income to buy food and other essentials.

An increase of this magnitude has a double whammy effect. On the one hand workers have to fork out more money for transport to get to work and back. Immediately they have less disposable income to live from. On the other hand, input costs of manufacturers increase as a result of the fuel price hike, which, over time, will mean that consumers will have to pay more for goods at the counter.

Forecasts are that oil prices will increase even further as there are signs that the surplus is coming to an end. On Monday the rand was trading lower at R15.76 against the dollar and the trust levels in Government not to act in a way that will cause a further weakening of our currency is very low.

Under these circumstances there is only one thing to do: Continue with tightening of the belt and spending wisely.

 

Issued by UASA