Small fuel price decrease no help for consumers in looming rough ride

The small fuel price decrease on Wednesday will not be of much help for consumers with a rough ride looming for millions of South Africans who have battled their way through the past year despite a cost-of-living crisis.

According to the department of petroleum and mineral resources the price of petrol will decrease by 22 cents per litre for 93 and 95 and between 41 and 42 cents per litre for diesel, largely thanks to steep declines in global oil prices in April as markets were rattled by US president Donald Trump’s tariffs and trade wars, while the rand weakened slightly amid the shocks.

The average Brent crude oil price declined from $71.04 to $66.40 over the month and the average international product prices for petrol, diesel and illuminated paraffin decreased during the period under review.

Despite the good news at the pumps, Debt Rescue CEO, Neil Roets, warns that the past few months have been among the toughest yet for citizens from all walks of life and the tiny fuel price decrease will make no discernible difference in the lives of consumers who are still facing prices above R20 per litre at the pumps.

ALSO READ: Steep increase in price of household food basket means more people will go hungry

Food prices increasing and interest rates unsustainably high

In addition, he points out, rocketing food prices and unsustainably high interest rates keep them locked into a debt cycle that they cannot escape.

“While any financial relief is obviously welcome, authorities must recognise that South Africans are at breaking point right now under the combined onslaught of food prices that have increased far above the inflation rate, interest rates that are still among the highest they have been in a decade and the relentless financial onslaught from Eskom for an essential service that affects the survival of every man, woman and child.” 

The price of food is unsurprisingly at the top of the list of concerns for the majority of households across the nation, not least because recent price increases for basic foodstuffs now place nutritional meals out of reach, especially among lower-income families, he says. 

While the latest inflation data for South Africa showed an easing, food prices in the country saw a sharp increase. The April 2025 Household Affordability Index confirms the daily reality facing people today: the cost of survival is rising faster than people can keep up.

“The figures in the April 2025 Household Affordability Index, released by the Pietermaritzburg Economic Justice and Dignity Group, reflect a brutal truth that millions of South Africans are no longer coping,” Roets says.

ALSO READ: Modest decline in essential food prices but savings not always passed on

Nutritious food off the table – fuel price decrease no help

Aliya Chikte, project officer at the Alternative Information and Development Centre (AIDC) agrees, saying that although food inflation is slowing down, the average cost of a household food basket is unaffordable in the context of mass unemployment and deep impoverishment.

The latest report shows that the average household food basket, catering for a family of four, now costs R5 420.30, but a nutritionally adequate food basket is priced at R6 666.26. “That is a shortfall of R1 245.96, a gap that low-income households simply cannot close through income alone.

“This means that workers earning the National Minimum Wage are R2 000 short on food after covering just electricity and transport, leaving only R453.28 per person per month for food, far below the Food Poverty Line of R796.”

Roets also points out that the effect of VAT on the household food basket is significant, with 22 of the 44 food items in the total household food basket subject to VAT. “Food items subject to VAT made up 46% of the total cost of the household food basket in April. With zero-rated food items costing R2 929.32 and foods subject to VAT R2 490.97, VAT on the total household food basket amounted to R324.91. 

“This means that 6.0% of the household food basket was made up of VAT. This is money that could be used to buy more food.”

ALSO READ: What does lowest inflation in 5 years mean for repo rate?

Lower fuel price no help for government mistakes and lower salaries

He says that added to this is the sad fact that hard-working taxpayers will ultimately pay for any mistakes the government makes. “When the Western Cape High Court stopped the tabled VAT hike, it passed the legal costs on to Treasury and parliament. This means that taxpayers will end up footing this bill. Exactly how much remains to be seen, but it is likely to run into hundreds of thousands of rands.”

Adding insult to injury is the latest BankservAfrica Take-Home Pay Index, which shows that nominal average take-home pay declined to 17,811 in March 2025, 2.5% lower than February’s R18,272. This is due to intensifying economic headwinds locally and globally that continue to pressure growth prospects and confidence levels, Roets says.

“This raises concerns over potential impacts on employment and earnings in the coming months, despite the upward year-on-year momentum. It is no wonder that South Africans are fast losing hope, while desperately clinging to the belief that somewhere along the line, government will take action to turn things around for consumers.

“Until then, it is every man (and woman) for himself, it seems. The sad fact is that, for too many people, turning to traditional debt avenues offers the only immediate lifeline and this effectively sentences them to a term of unrelenting repayments – with interest of course – that traps them in a vicious debt cycle that is not easily broken,” Roets warns.