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By unknown | Jul 02, 2008 | COMMENTS [ 0 ]

Penwell Dlamini and Sapa

Penwell Dlamini and Sapa

South Africans seethed in anger yesterday as fuel and electricity price hikes hammered the average Joe's cost of living and foreshaddowing spiralling inflation.

Electricity rose by at least 27,5percent and petrol went up by 74 cents a litre at midnight, pushing it above R10 a litre for the first time in South Africa's history.

Fuel and electricity power the economy, so the increases will boost inflation as higher prices filter through to consumers.

Inflamed commuters yesterday pulled fellow travellers off buses in Johannesburg, blocked roads and stoned Metrobus property after the company hit them with a double whammy by raising fares and eliminating free transfers, effectively doubling the price of getting to and from work.

"July 1 2008 will go down as a terrible day for South African consumers," Cosatu said yesterday.

The union federation will take to the streets in rolling mass action from next Wednesday "in protest at these assaults on our living standards".

The federation said prices for many basics had risen recently, "and every time it is the poorest consumers who suffer worst, as they spend a higher proportion of their meagre incomes on basics such as food, paraffin for heating and taxi fares, which are all rising faster than the overall rate of inflation".

"As if all this were not enough, over the last two years we have had to cope with 10 increases in interest rates from the Reserve Bank, which are adding even more burdens on the thousands of workers who have had to borrow money. And more hikes are being threatened."

Paying off a mortgage now costs 36percent more than 24 months ago, Standard Bank said.

"The monthly cost of a mortgage of R500000, financed at the prime interest rate over a period of 20 years, was R4992 24 months ago. Now the cost of financing the same mortgage is R6769."

Cosatu said the price increases were putting South Africa's economic future in jeopardy.

"There is a growing danger that employers, faced with rising costs, will try to balance their books by retrenching workers. Some may have to close down altogether."

l See also page 16.


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