October 30, 2011. Last week South Africa’s Finance Minister Pravin Gordhan urged South Africans to try to do more with less, to be “more resourceful” in these extraordinary economic times. Gordhan made the comments when speaking to journalists ahead of his Medium Term Budget policy statement.
The international markets and ongoing Eurozone debt crisis suggest continued instability in the world’s economy, prompting the minister’s conservative and pragmatic approach.
Gordhan certainly must have known something because the 23c hike announced by the Department of Energy last week translates into a petrol price of R10.77 a litre for octane 95 from Wednesday, November 2, while octane 93 will cost R10.60. There are also significant increases in the cost of diesel and paraffin.
Of course this latest petrol price increase will further hit individual drivers in the pocket, but of concern, is the impact on the crucial SMME and small-to-medium sized business sector, especially those involved in logistics and provision of services. This is the area of our economy seen as crucial to stimulating growth and employment opportunities.
Durbanites, many of whom have already started to investigate lift clubs and car pools for work and school travel, are expected to have a hard look at patterns of travel, cutting out many of those non-essential trips and weekend jaunts to try to cope with the increases, which are, unfortunately, twinned with rising inflation. Whether there will be an impact on domestic holiday travel remains to be seen.
With a volatile rand, which has taken a hit against the US dollar in recent months, the high fuel prices are expected to remain a firm reality in the months ahead. Experts have stated that whenever the oil price is above $100 a barrel, the outlook for the SA petrol price, and our economy, will be compromised. – Ridge Correspondent