Durban – Economists have warned that consumers should brace themselves for higher food prices after the Department of Mineral Resources and Energy announced the highest hike in petrol and diesel since 2022.
The Department of Mineral resources and Energy announced yesterday that tomorrow, both grades of petrol will increase by R1.71 a litre, while diesel (0.05% sulphur) will increase by R2.84 a litre and diesel (0.005% sulphur) will increase by R2.67 a litre.
Economist Dawie Roodt said: “The problem for the consumer is that food prices have been coming down at a slow rate and unfortunately with this massive increase in the fuel price, we can expert food prices to start going up.”
Professor Irrshad Kaseeram, of the University of Zululand’s Economics Department, said that since July there had been a consistent rise in the fuel price which had been passed to food prices, and last month’s food inflation was at 9.9%. “This time round, the price rises are massive, hence we can expect further rounds of rises in food prices as the cost of the road haulage industry has risen sharply this month.”
Dr Sanele Gumede, an economics lecturer at the University of KwaZuluNatal, said higher food prices were inevitable. Gumede said the poor would be affected the most. “Unfortunately the poor spend 80% of their money on food and now with the latest massive increase in petrol and diesel, they will have even less money in their pocket. The poor have also been faced with a taxi fare increase.”
Professor Bonke Dumisa, an independent economic analyst, said the increase in fuel prices would have a massive impact on food prices.
Dumisa said he attributed the massive increase in fuel to the higher price of Brent crude oil.
“The price of Brent crude oil is currently just over $88 a barrel and to think that just five weeks ago the price of Brent crude oil was at less than $80 a barrel … this is a big increase. To a lesser extent the weaker rand has also impacted the increase in fuel as we do buy Brent crude oil in dollars. The one positive we can see is that the total price of fuel and diesel that we are paying now is still less than the price of fuel that we were paying at the same time last year. We are, however, heading in the wrong direction with this latest increase.”
Layton Beard, AA spokesperson, said that the increase in fuel prices was in line with prices last seen in August last year, but not at the record highs seen in July 2022.
“The diesel price hikes will push the suggested wholesale cost of this fuel to the highest it has been since December last year. The increases to the fuel prices – especially to diesel – will have negative consequences for all consumers as higher input costs will be recovered through higher prices at the till.”
He said he expected high oil prices to continue. “The Reuters news agency reported that analysts expect that Saudi Arabia, the world’s biggest oil exporter, would extend its voluntary output cut into October, keeping oil supply tight and prices high.”