Bumpy road ahead for SA consumers
Higher fuel price, toll fees and carbon taxes reduce scope for Reserve Bank to drop interest rates
SA’s motorists, already braced for a hit from higher toll fees and taxes, are set for a 5% increase in the fuel price on Wednesday, a move that economists say will hurt an economy that is already taking strain from weak consumer demand and the effect of Eskom’s power cuts. SA’s motorists would fork out an additional 74c/l, pushing the price in Gauteng up to R14.82, the Central Energy Fund (CEF) said on Monday. While this is still 13% lower than the record R17/l in May, it is a major headwind for the economy. The rand’s 7.6% decline since reaching its 2019 highs against the dollar in early February and the 22% increase in the price of Brent crude mean local prices could rise further in the months ahead. That will reduce the scope of the SA Reserve Bank to drop interest rates, although an inflation rate comfortably within the 3%-6% target range means that the monetary policy committee, which meets from March 26 to 28, is unlikely to tighten policy. Higher rates would be a major headac...
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