SA has been in the grip of a cost-of-living crisis since the Covid-19 pandemic hit about six years ago, but the unfolding war in Iran is threatening to worsen the situation every day.
Just a week ago, the effects of the US-Israeli war on Iran were felt far beyond Middle Eastern shores when fuel prices skyrocketed globally and here at home. With no sign of a peaceful resolution of the conflict in sight, there are growing fears that we could now be on the precipice of an economic disaster of immense proportions.
Not only have oil prices soared globally, but there are shortages of fuel in some countries due to the closure of the Strait of Hormuz, one of the world’s most important waterways, transporting about 20% of global oil.
With each day of the war, more problems are emerging, with inflation here in SA expected to rise, which will result in the increased cost of borrowing money through interest rate hikes.
The cost of the food we eat in our homes is now set to increase even further due to escalating transport costs and farmers passing the cost of production onto consumers.
Against this backdrop, the government last week sought to cushion the blow brought by record fuel prices by announcing the cutting of taxes on diesel and petrol. While these measures are temporary and being reviewed given the unpredictable state of global affairs, it was bitterly disappointing that paraffin users were not included in the initial measures by government.
Quite how this was allowed to happen is absurd given the adverse impact of the sky-high cost of paraffin on poor families. According to Stats SA, more than 500,000 households rely on paraffin as an energy source.
These are families that have no alternatives in their homes and instead depend on the petroleum liquid for survival. For a household surviving on grants, the double increase in the retail price of paraffin spells doom.
The government’s explanation that work is still underway on targeted measures to protect all citizens is simply not good enough. To leave the poor to bear the brunt of adverse effects of the war in Iran while trying to find a policy intervention is tone deaf.
With the latest forecasts that fuel prices could rise even further by the end of this month, many South Africans will be driven deeper into poverty and desperation. This will be an indictment on the government for failing its most vulnerable citizens.
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