By Neil Roets
The announcement by the Department of Mineral Resources and Energy of a steep fall in the price of diesel between R1.52 and R1.57 a litre in December, is welcome news for the country.
This, on the back of global oil prices plunging to their lowest levels since 2021 in November, and a strengthening of the rand against the US dollar. There is very little to celebrate though as this news is tempered by yet another hike in the price of both 93 and 95 unleaded petrol - by 59c a litre respectively from Wednesday 7 December onwards.
As the country heads into the festive season, the question on everyone’s lips is: will we see a corresponding drop in food prices to provide some relief on our pockets as we head into the festive season?
Not likely, as I foresee a bleak end to a very taxing year for South Africans, on all fronts. The petrol price hike will inevitably lead to an increase in public transport costs and for millions of working-class citizens, this means their once-a-year trip to visit their families, is no longer on the cards. The reality is that fuel price hikes have a knock-on effect on food prices, and these price increases come at a time when families are battling to put three nutritional meals on the table, let alone a little extra to celebrate the holidays.
It is distressing that the price of staple foods and drinks like milk, bread and maize just keep on climbing, despite the relief at the pumps for diesel-driven vehicles.
This is substantiated by the latest Household Affordability Index by the Pietermaritzburg Economic Justice & Dignity group (PMBEJD) that shows that the price of staple foods in South Africa continues to rise in November. According to the PMBEJD, times are tough and are going to get tougher for consumers.
The PMBEJD basket comprises 44 core food items most frequently purchased by lower-income households, who make up most households in the country. The group’s basket of nutritional foods came to R4,835.96 up by R48.13 (1%), from R4,787.83 in October 2022, and up R563.52 (13.2%), from R4,272.44 in November 2021. The year-on-year increase outstrips headline inflation by quite a considerable margin, and even food inflation tracked by Statistics South Africa. Headline inflation was recorded at 7.6% in October 2022, up marginally from 7.5% in September 2022.
According to Stats SA, bread & cereals, meat and dairy are currently driving food prices higher in South Africa. This also reflects within the PMBEJD’s data, which shows milk prices up 12%, bread prices up a staggering 20% and meat prices up between 6% and 16%.
These are all foods that families need most to ensure nutritional needs are met. We are sitting on a ticking time bomb, with over 20 million people across the country currently going to bed hungry every night. We simply cannot let this trajectory continue into 2023. The right decisions need to be made – and soon – by our major food retailers and other parties who play a role in determining food prices. Why is there a deafening silence from this front?
This question mark was escalated earlier by Mervyn Abrahams of the PMBEJD, who noted that although petrol prices dropped in previous months, no corresponding drop in food prices was made at the retail level.
The latest petrol price hike will almost certainly lead to South Africans leaning even more heavily on their credit and store cards to be able to celebrate the festive season in some kind of way – and for many this will simply mean putting enough food on the table.
My advice to those who fall into this trap is to seek help from a registered debt counsellor who can assist them to manage their financial predicament. This has been a very successful solution for thousands of consumers who are plagued by over-indebtedness.
Neil Roets is the CEO of Debt Rescue
The views expressed here are not necessarily those of IOL.
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