By rejecting the OGRA summary recommending a massive increase in the price of fuel, of over R 11 per litre, the Prime Minister indirectly acknowledged that fuel prices, and the inflation they represent, had reached intolerable levels. However, it is not likely that he will be able to resist the pressure to hike for two reasons. First is IMF pressure, where the Fund wants revenue raised, especially by such means as the government is using to stop the hike. Second comes the direction that oil prices are taking globally. When it is remembered that the rupee is declining against the dollar, the effect of any global increase is correspondingly magnified. Fuel prices make everything go up, because of increased transport costs, and they also drive up electricity prices, in the shape of the fuel adjustment surcharge. Whether it’s the surcharge or the tariff, the result is a higher power bill. Businesses pass that cost on to consumers in the shape of higher prices of all goods and services.
The net result of all this is an increase in human suffering. The Prime Minister refused to impose a lockdown for the covid-19 epidemic because of his concern for the poor, so it is a safe assumption that he is concerned about this inflation. However, his Finance Adviser, Shaukat Tarin, has said bluntly that the situation will get worse before it gets better. His Planning Minister, Asad Umar, sees a change in March. Meanwhile, the poverty rate will go up, throwing millions more into it. A point has already been reached where suicides are on the up. A much larger number is having to cut down on meals, both quantity and quality. This too will spread.
The PM should remember that he came to power not merely because he promised to end corruption, but because he said that by doing so, people would lead a better life. Instead, people find they are worse off than before. The day of reckoning at the hustings looms ever closer. Is there enough time for him to change the trajectory he is on?
