Johannesburg-
The Automobile Association (AA) has warned of another fuel price hike in July,
while motorists are still reeling from the third consecutive increase in June.

The
rand breached the 13 mark to the US dollar this week alongside other emerging
markets, coming under pressure as investors turn to asset classes, deemed less
risky, in the US and other developed countries.

The
reasons for the fuel increase in June include a weaker exchange rate and a
rising international Brent Crude oil price.

The
petrol price increased on Wednesday by 82 cents per litre, diesel was hiked by
87 cents a litre and the cost of paraffin is up by R1.09 a litre.

Fin24
took a look at the four sectors most impacted by the soaring expenses.

Un-electrified
households

The
majority of South Africans use electricity for heating and cooking, but
significant numbers of people still rely on illuminated paraffin as a power
source, particularly in the winter months.

According
to 2016 figures from Statistics SA, 84.2 percent of the population is connected
to electricity while 76.8 percent use it for cooking.

Even
people who are connected to the grid sometimes use paraffin as it is a zero
rated item for value added tax (VAT) and is cheaper than electricity.

Farmers

Diesel
is a one of the big input costs for farmers, especially livestock and poultry
farmers who transport feed and animals regularly.

Paul
Makube, senior agricultural economist at FNB Agri-Business commented that
farmers will come under increased pressure with rising fuel costs, while the
harvest season for maize- a staple food item in SA- is underway until August.

Makube
added that farmers are price takers and are usually unable to pass on the costs
to consumers as the price is set by retailers or producers, further up the
value chain.

He
does not expect a large spike in food prices for consumers as farmers have seen
a bumper crop for key food items this season.

 Food
inflation has been slowing since the end of the drought and several items have
become cheaper including breads, cereals and fruit.

Public
transport users

Bus
companies are under pressure with rising fuel costs, after the negotiated
settlement which ended a nearly four week strike in the sector giving bus
driver salaries salary increases of 9 percent for the first year and 8 percent
for the second year.

Fin24
reported earlier this week that Golden Arrow Bus Services announced plans to
increase fares in the coming months as petrol prices soar.

Poor
households already spend a greater proportion of their income on transport
costs as they usually live further from business nodes.

Stats
SA said in 2015 that more than two-thirds of households who fall in the lowest
income bracket spent more than 20 percent of their monthly household income per
capita on public transport.

Motorists

Those
who are lucky enough to have a car are experiencing pain at the fuel pump for
the third consecutive month.

People who are able to purchase new vehicles
with low carbon footprints are better off than those with older cars,
especially if they have stop-start technology found in upper end cars which
saves fuel in traffic congestion, according to Ofentse
Mokwena, a transport economics lecturer at the University of the North West.

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