The slide of the rand to its lowest point since March 27 on Tuesday coincided with the price of Brent crude oil rising by 0.8%, a development that should create more pain for South African motorists.
The price of petrol has already risen by 15% in 2019, with another huge hike that may see petrol rise by 51 cents a litre and diesel by five cents predicted by the Central Energy Fund (CEF).
The rand is currently the worst performing emerging-market currency, according to Bloomberg, Business Day reports.
The rand dropped by 1.15% to R14.3264/$ by around 5pm on Tuesday.
While rising fuel prices are one way the effects of a weakening rand will be felt, not only motorists will be affected, as inflation will worsen and the cost of imported goods will increase.
The South African economy is still reeling from the effects of Eskom’s bout of load shedding at the beginning of the year, culminated in intensive rolling blackouts in March.
It was reported on Tuesday that Public Enterprises Minister Pravin Gordhan has teamed up with Treasury in an attempt to convince South Africans that the battling power utility is not about to collapse.
Following news of an earlier-than-expected R5 billion cash injection into Eskom, Gordhan said that despite the financial and operational damage the utility has suffered in recent years, the problem is “well under control”.
“We have the problem. We understand [what the changes are] that need to be made. Eskom is not about to collapse. That it is in difficulty as a consequence of previous leadership we had before, and among those difficulties, are the operational difficulties, meaning providing enough energy,” Gordhan told EWN.
This comes after the DA accused Finance Minister Tito Mboweni of “secretly” handing parliament the details of a R17.652 billion “emergency” bailout of Eskom.
DA MP Alf Lees said Mboweni had needed to table the report according to public finance laws, but had allegedly attempted to sneak it to the relevant committee without much fanfare “to hide the true extent of this crisis”.
Lees said the first R5 billion from the total amount was already paid to Eskom on April 2.
The unbundling is due to start in June and will involve establishing a subsidiary of Eskom Holdings with an independent board. The new company would own Eskom’s entire transmission network and power stations.
The split was envisioned in government policy documents written 20 years ago, but was finally announced by President Cyril Ramaphosa in his 2019 state of the nation address.
(Compiled by Daniel Friedman. Background reporting, Kaunda Selisho)