South African authorities have announced a temporary suspension of a fuel levy from April 1 to May 5 to provide short-term relief from rising prices amid the ongoing conflict in the Middle East.
As a net importer of oil and petroleum products, South Africa is particularly vulnerable to inflation shocks. Already, higher oil prices and a weaker currency have led to sharp increases at the pumps.
Speaking on the one-month fuel levy cut, Finance Minister Enoch Godongwana told local media that "what the government can do is to mitigate the effects for a specific period," describing the fuel price hikes as "a shock and a blow to the economy."
However, some residents expressed skepticism about the short-term measure.
"I don't think it can help for one month. It's just a drop in the ocean unless they've got a long term plan. I think if they've got a long term plan it will be okay, but just for one month, just a drop in an ocean," said a local taxi driver.
"It's got a ripple effect on everything, so transport it's got to do with food, your necessities. So I don't know if the medium and lower classes will be able to handle it. Obviously salaries and stuff are not going up, and everything's just going to go up, meat, your normal necessities, bread, milk," said Nischal Singh, a driver.
"It's going to be a lot of problems. Actually, we were struggling a bit, but now this time it's gonna be worse. The problem is the taxi industry, it usually fluctuates. So now it's just going to be worse. We're not going to make enough money, we're not going to have enough profit and so on," said Nicholas, another driver.
The government's decision to pause the fuel levy increase comes as other oil-importing countries take similar steps to protect their economies.
Farmers, meanwhile, have been hit with a double blow, having to deal with higher diesel and fertilizer costs. South Africa imports 80 percent of its fertiliser.
According to economists, these costs will soon feed into food price inflation that will hit low-income consumers the hardest.
"A lot of people are very poor and increased fuel costs hit the poor hardest, both directly in terms of their transport. You've got to bear in mind that South Africa has inherited spatial inequalities due to apartheid, where people live often very far from where they work. And so transport costs, of course, are quite important," said Azar Jammine, chief economist of Econometrix, a South African independent economic consultancy.
South African Finance Minister Enoch Godongwana said the fuel levy relief will be temporary and will be re-assessed in May.
South Africa temporarily suspends general fuel levy to ease pressure as oil prices rise
