Fuel price rise reflects the state of the nation

Like the value of a country’s currency, liquid fuel prices often reflect the state of its economy – especially when both are in effect regulated by the government – as is the case in South Africa.

The last two months have demonstrated this perfectly. This week’s liquid fuel prices have once again delivered a negative opinion not only of our economy but of how we are governed. Think back on the past 30 days.

The effects of more expensive liquid fuels (including gas) will be felt on everything we grow, make, export, import, and on all South Africans whether or not they have motor vehicles.

Our depreciating currency will make all imports more expensive. Pricier motor fuels will add to transport costs and therefore prices of everything moved around inside the country, including food like maize, wheat, animal products – and people.

The price of crude oil is reflected in hundreds of goods from plastics to paint to lipstick and the foil around bottle tops.

Work travel will get more expensive. In the case of taxi journeys, it will cost more the day after the new price of fuel reflects on the pumps. And, if we are ever again allowed to travel abroad, tickets to do so will be out of reach for more people than ever.

The negative ramifications of R20 a litre for petrol or diesel are too numerous to mention. But there is no point complaining because it is very little -- if anything -- the government can or will do to halt the process or reduce the impact.

The government’s track record of running economic entities like Eskom and the hundreds of other state-owned enterprises constantly broadcasts negative signals to potential investors and all foreigners. Their opinion among other things affects the value of the Rand.

As for the impending legislation to allow the seizing of private property without compensation, it is a trumpet blast of negativity heard throughout the world. It is guaranteed to scare off anyone thinking of investing here. That too is reflected in our currency.

Motorists who think fuel taxes could be reduced must be unaware that to all intents and purposes, the government is broke. It is unlikely – to put it gently – to reduce a tax that the oil companies religiously pay the Treasury in cash every quarter. Besides crude oil prices are set in US dollars, a great excuse to shrug.