Chief Economist at Old Mutual, Johan Els says government’s intervention to limit the impact of rising prices on consumers is very limited.
Food and fuel prices have been rising steadily as a result of supply chain disruptions due to COVID-19 lockdowns in China and the impact of the Russia-Ukraine conflict on the price of Brent crude oil and other commodities.
The latest petrol adjustments announced by the Department of Mineral Resources and Energy have pushed the price of fuel to more than R25 litre.
Els says consumers will have to cut down on spending.
“There’s a lot of potential negatives around from the petrol price, food prices, overall inflation interest rate increases and lots of uncertainty. But we have to take into account if we’re talking about pricing first. We want to be a market based economy,” adds Els.
“We are a market based economy and we have to realise that government cannot always control pricing, that’s very important. So with these price measures that we see, we as consumers [should] adjust our spending patterns. So if we forced to spend more on fuel and transport, we spend less elsewhere.”
Meanwhile, the taxi industry in KwaZulu-Natal has called on government to intervene on the fuel price hikes in order to save jobs.
The South African National Taxi Council (Santaco) says if nothing is done to cushion the industry, South Africans must brace themselves for more job losses.
The multi-billion rand sector is responsible for transporting millions of South Africans daily.
The video below is reporting on the impact of the fuel price increase: