[imagesource: Neil McCartney]
Batten down the hatches, because here comes trouble.
When Finance Minister Enoch Godongwana announced a temporary relief on fuel taxes for April and May, with the National Treasury reducing the general fuel levy by R1,50 a litre, there was cause for celebration.
That temporary relief expires on May 31 and it looks like June is going to be one for the record books.
It’s not just the cost of filling up that suffers when fuel prices surge.
The bad news below comes via BusinessTech:
Under-recoveries in fuel prices on 17 May show that petrol prices are set to increase by R2.12 to R2.17 per litre in June, while diesel is expected to increase by between R1.51 and R1.53 per litre.
With the R1.50 levy re-entering the picture, this means that motorists could see a R3.67 per litre hike for petrol and a R3.03 per litre hike for diesel, potentially pushing prices to as high as R25.50 per litre at the pumps.
R25 a litre. As the kids would say, WTAF?
Petrol attendants better be ready for motorists filling their tanks and then ducking out on paying.
I’m not a Schalk Bezuidenhout superfan but this ad is on the money:
Over the past five years, fuel prices have just about doubled and inflation and interest rates have shot up as a result.
Moneyweb crunched some numbers related to popular vehicle models and they’re not pretty:
Toyota’s figures show that the Hilux uses some 13 litres of petrol per 100km, depending on the engine choice. The diesel engines are more economical with consumption of about nine litres per 100km.
The Volkswagen Polo uses some seven litres of fuel per 100km, according to the manufacturer’s statistics.
If the petrol price increases as expected in June, driving the average 2 500km per month will cost a Hilux owner nearly R8 000 per month in petrol or around R5 600 in diesel.
Driving the smaller Polo Vivo will cost the average owner R4 200 per month.
Civil action group OUTA is putting pressure on the government to extend the temporary relief past the end of May but at present, there’s no news on that front.
Those with a nice big bond on a house really took a hit yesterday when the Monetary Policy Committee (MPC) announced it was increasing the repo rate by 50 basis points to 4,75%.
In layman’s terms, your bond repo rate likely went up by half a percent and that adds up:
petrol price at all time highs
regular interest rate hikes
youth unemployment at record highs
inequality at eye watering levels
rolling blackouts now the norm
it’s remarkable government officials aren’t catching hands from citizens
— Don Petty Cash (@iamkoshiek) May 19, 2022
You can dig a little deeper into the repo rate and how it affects bond repayments in this thread.
Everyday items will also become more expensive as a result of that hike, says Tatonga Rusike, Sub-Saharan Africa economist at Bank of America.
Again from BusinessTech:
April inflation data shows that some of the pain points of price increases both month to month and year on year are in meat products, fatty oils, and alcoholic beverages. Bread and cereals pain is still to come.
“It is probably worthwhile to eat fruits and vegetables, at home, and be in touch with loved ones as communication costs fall. Sadly, high fuel price increases and electricity costs are less avoidable, and even higher costs are on their way.”
Waking up to the ping of June’s debit order notifications is really going to sting.
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