Both petrol and diesel will see an increase in price this month, according to the recent fuel price changes published by the Department of Energy.
Both 95 and 93 grade petrol will increase by 11 cents per litre, illuminating paraffin will increase by 24 cents per litre and diesel will increase by 26 cents per litre.
But, hey, at least Pick n Pay Smart Shoppers can now use their points to purchase fuel at certain BP fuel stations across the country. Silver linings, people, silver linings.
While average international product prices for petrol, paraffin and diesel have seen a recent decrease, this positive movement was undermined by a weak rand, which depreciated against the US dollar.
Despite a brief recovery toward the end of the month, the rand floated at around the R15.17 to the US dollar mark for most of August.
This was partly due to international dynamics beyond our control, such as the ongoing US-China trade war, and President Trump pushing for higher tariffs and duties on goods imported from China. This is likely to impact international oil prices in the coming period, and the worst is yet to come with the bulk of the latest tariff increases being put into full effect in December 2019.
Local challenges, of course, also played a big role. This included state-owned enterprises (Eskom being the biggest culprit) requiring further bailouts from the Treasury, political scandals and interference.
You may remember that Minister of Finance, Tito Mboweni, recently laid out an economic plan to save South Africa’s economy, which was praised by economists and analysts, but criticized by the ANC’s alliance partners and unions.
Mboweni’s plan included proposals about creating export competitiveness, prioritizing labour-intensive growth, harnessing regional growth opportunities and implementing focused industrial and trade policy, to promote competitiveness and facilitate growth, among others.
The Business Leadership SA (BLSA), whose members include some of the biggest companies in the country, said of the plan that it had been a long time since the government came out with coherence and authority on economic policy, and that the Minister’s intervention would help South Africa with the things that really matter.
Little is being done to curb wasteful, fruitful and excessive government expenditure, and even less to solve the underlying problems plaguing our SOEs. Ratings firms have gone so far as to caution about South Africa’s debt-to-GDP ratio, having shrunk 3.2% in the first quarter of 2019, and it is widely speculated that we could only narrowly be avoiding a recession.
It remains to be seen what will become of Mboweni’s plans.