SA consumers in for a rough ride

The rand is getting stronger, but it’s not enough to save us from the wrath of the rampaging oil price.

South African consumers are in for a rough ride and can expect to be hit by the cost of petrol, electricity, washing powder and pretty much anything packaged in plastic.

Monday’s oil price is at $68-a-barrel, having increased by almost 100% since the $35-a-barrel level seen in January. At the same time, the rand has strengthened from its weakest point of R10 to the dollar at the beginning of the year to about R8 today.

According to Tony Twine, director and senior economist at Econometrix, while the strengthening rand provides a “partial cushion” to the rising oil price, it’s not enough to protect the consumer.

The cost of coal, which takes its lead from the crude oil price, inevitably increases alongside the fuel price. This could well lead to South Africans having to pay more for electricity in the near future.

The price of petrol will also increase once again, says Twine — probably at the beginning of July — if matters don’t change drastically.

Increases will also filter down to solvents, which means that washing powder, floor polish, paint and laminated paper will become more expensive.

Another major price rise will be in plastics. Oil is a fundamental feedstock in the creation of plastics, and this will effect all plastic goods, as well as the cost of plastic packaging.

“The rand would have had to appreciate by 50% to cancel the effects of the high oil price,” says Twine. But that wouldn’t necessarily be a good thing, he adds.

“We are a two-way trading nation,” says Twine.

“If the rand strengthens by too much, we will start to lose jobs.”

Ultimately, it’s a trade-off. The high oil price and expensive dollar price will make goods and services more costly for the SA consumer, but it seems that we have to be a nation of martyrs, and live with it in order to keep exporting, and hence, keep our economy alive.

These are unprecedented times, and the role of media to tell and record the story of South Africa as it develops is more important than ever. But it comes at a cost. Advertisers are cancelling campaigns, and our live events have come to an abrupt halt. Our income has been slashed.

The Mail & Guardian is a proud news publisher with roots stretching back 35 years. We’ve survived thanks to the support of our readers, we will need you to help us get through this.

To help us ensure another 35 future years of fiercely independent journalism, please subscribe.


Coalition politics and law: The fight over Tshwane

With coalition politics on the rise, particularly in local government, this kind of court case is likely to become more common

High court declares Dudu Myeni delinquent

Disgraced former SAA chairperson Dudu Myeni has been declared a delinquent director by the...

SANDF inquiry clears soldiers of the death of Collins Khosa

The board of inquiry also found that it was Khosa and his brother-in-law Thabiso Muvhango who caused the altercation with the defence force members

No back to school for teachers just yet

Last week the basic education minister was adamant that teachers will return to school on May 25, but some provinces say not all Covid-19 measures are in place to prevent its spread

Press Releases

Road to recovery for the tourism sector: The South African perspective

The best-case scenario is that South Africa's tourism sector’s recovery will only begin in earnest towards the end of this year

What Africa can learn from Cuba in combating the Covid-19 pandemic

Africa should abandon the neoliberal path to be able to deal with Covid-19 and other health system challenges likely to emerge in future

Coexisting with Covid-19: Saving lives and the economy in India

A staggered exit from the lockdown accompanied by stepped-up testing to cover every district is necessary for India right now

Covid-19: Eased lockdown and rule of law Webinar

If you are arrested and fined in lockdown, you do get a criminal record if you pay the admission of guilt fine

Covid-19 and Frontline Workers

Who is caring for the healthcare workers? 'Working together is how we are going to get through this. It’s not just a marathon, it’s a relay'.

PPS webinar Part 2: Small business, big risk

The risks that businesses face and how they can be dealt with are something all business owners should be well acquainted with

Call for applications for the position of GCRO executive director

The Gauteng City-Region Observatory is seeking to appoint a high-calibre researcher and manager to be the executive director and to lead it

DriveRisk stays safe with high-tech thermal camera solution

Itec Evolve installed the screening device within a few days to help the driver behaviour company become compliant with health and safety regulations

The best local and international journalism

handpicked and in your inbox every weekday