A Durban University of Technology (DUT) lecturer has warned that the latest fuel price increases could raise the cost of food, transport and doing business in South Africa.
The price of petrol 95 went up by R3.33 a litre on October 7. Diesel rose by up to R3.24 a litre, IOL reported.
“Fuel is a fundamental input into almost every part of the economy. South Africa is particularly sensitive to fuel-price movements because goods, agricultural products, workers and services depend heavily on road transportation,” said Dr Christopher Ikechukwu Ifeacho.
Ifeacho is a lecturer in the Department of Public Management and Economics at DUT.
The Department of Mineral and Petroleum Resources said the increases were mostly caused by higher international oil prices. It said Brent crude rose from US$87.89 to US$101 a barrel.
The department linked the rise to tensions between countries, doubts over oil supplies and higher shipping costs.
According to IOL, higher fuel prices can make it more costly to move goods from farms, factories and warehouses to shops. This can add to the price of everyday items.
Farming is especially exposed, because diesel is used for irrigation, harvesting and food delivery. But Ifeacho said higher fuel prices do not automatically lead to the same rise in food prices. He said several factors affect the final cost of food.
For families, higher fuel costs can mean spending more on commuting and school transport. Low-income households are hit harder because they spend a bigger share of their income on basic needs.
“Higher fuel costs can reduce real household purchasing power indirectly through the higher prices of other goods and services,” Ifeacho said.
Businesses in logistics, farming, mining, building, manufacturing and retail may also face higher running costs and smaller profits. Ifeacho said companies can absorb the costs, work more efficiently or pass some costs on to customers.
“This is why a fuel-price increase can have an economy-wide effect even on businesses that are not themselves large fuel consumers,” he said.
IOL reported that fuel price increases can feed into inflation. If the pressure lasts, it could affect wage demands and slow economic growth as families cut spending.
Ifeacho said the main concern was how long high fuel costs lasted and how widely they affected prices across the country.
He advised households to plan their budgets carefully. He suggested combining trips, planning routes, sharing lifts and using public transport where possible.
“Most importantly, households should recognise that a temporary fuel-price shock and a sustained increase are different situations,” he said.
Ifeacho said the country would need better public transport, stronger logistics systems and more varied energy sources to reduce its exposure to fuel price shocks.
Source: this article is based on reporting by IOL. Image: IOL. Written with the help of AI and published by the Tzaneen Voice Business desk. See our Editorial Standards.
Anelisa Nkuna covers business and money news for Tzaneen Voice. Anelisa reports on the rand, fuel prices, interest rates, jobs, Eskom, Transnet, farming and company results. The aim is simple: explain what the numbers mean for household budgets, small businesses and workers in South Africa.