Price shocks aheAD
SOUTH Africans should brace themselves for hard times ahead as prices of commodities such as electricity, petrol and food are set to skyrocket.
"The massive increases this year are crippling. It is sad that in 2010, when we were supposed to showcase our entrepreneurial ability and beautiful country to the football world and capitalise on the soccer spectacle, there are no opportunities for ordinary people," economist Nicholas Maweni said..
He said the recent interest rate cut by Reserve Bank Governor Gill Marcus was a relief, but that low income earners do not benefit since they do not have contracts with their banks such as housing bonds.
Yesterday the Department of Energy announced that petrol would increase by 48 to 49 cents a litre from Wednesday next week.
Diesel will increase by 48,5 cents a litre, while the wholesale price of illuminating paraffin will jump by 21 cents a litre.
In his Budget speech, Finance Minister Pravin Godharn increased fuel levies and taxes.
The increase was set at 25,5 cents a litre in the levy on petrol and diesel with effect from next week.
This comes on the back of the first of three massive 25 percent Eskom electricity tariff increases that take effect today.
Economists are predicting massive increases in the price of food, furniture, clothing and other commodities.
"Petrol increases always have a spin-off that not only affects transport costs, but food prices as well because food has to be transported.
"The owner of a local spaza shop will have no choice but to increase the margin of his food prices as well," Maweni said.
Other crippling increases include:
lBuses, taxis and train services will increase prices. Metrorail's increase of train fares will be between 20 and 25 percent is today.
lThe South African National Roads Agency effected toll road tariff increases on March 1 according to the consumer price index, which was at seven percent between November 2008 and November 2009.
lAirport taxes are to increase after Airports Company of South Africa was granted a 40 percent tariff hike yesterday, down from the 59,9 percent it initially asked for.
lThe National Energy Regulator of South Africa (Nersa) approved a 6 percent tariff hike for Transnet's fuel pipelines, effective today.
Consumers reacted with shock and despondency yesterday.
Ferari Mutsikira of Cresta said the government should consider the poor since the increase in the petrol price would affect them the most.
Maria Gumede of Thembisa said: "All my money will now simply be spent on food and transport."