UPDATED: Effect of the Russia-Ukraine war on South African consumers

The war in Ukraine has been raging on and South Africans have been warned about the pending effects the conflict will have on consumers' pockets.

Apart from the political reasoning for the war, many people have been wanting to know why the war is affecting South African fuel and food prices. 

Here's a list of the major natural resources that make Ukraine such an important global player.

As much as South Africa will feel the impact of the Russia-Ukraine conflict on food prices, we are also set to benefit from it through maize exports, according to Reuters. 

So, how will South African agriculture - and consumers - feel the war in Ukraine?

On Thursday 10 March 2022, South Africans reacted to Cyril Ramaphosa calling Vladimir Putin.

South Africans have questioned the country's response - or lack thereof - to the Russian invasion, but the Conversation shared a very insightful piece as to why that is; history may explain South Africa’s refusal to condemn Russia’s invasion of Ukraine.

Here's what we know so far:

We saw the shocking story of someone filling up their tank and not paying their bill, leaving a petrol attendant with a R733.10 bill to cover.

Fuel Price

André Thomashausen is an emeritus professor of international law at Unisa and he spoke to local media outlet IOL and stated the following:

• “In a worst-case scenario, South Africa could expect liquid fuel prices to increase to about R40 per litre."

• “As Eskom energy production depends much on imported diesel, electricity prices could increase by up to 40%."

• “This could have a devastating effect on all the parameters of the current budget and sink South Africa’s hopes for a post-Covid economic recovery.”

The rising price of commodities like fuel has severely impacted South Africans and experts fear that this could only be the beginning of the impact.

Cooking Oil

People are starting to panic-buy cooking oil.

Oxford Supermarket shared with IOL that people were sending in car guards to purchase five litre sunflower oil on their behalf.

“We have stock for the next months, but if informal traders and shop traders come in and clean out the store, then there won't be enough for the ordinary customer. We had a situation where people were sending in car guards to buy oil for them," Oxford owner Brett Latimer said. (IOL)

Bread

ECR Newswatch reports that according to the Observatory of Economic Complexity, Russia was the world's top exporter of wheat in 2019 at over $8 billion, while Ukraine rounded up the top five exporting countries.

GrainSA economist Helen Viljoen says we have started to see the effects.

Diplomatic Relations

Interfax Ukraine reported rocket attacks on military facilities throughout Ukraine and that Russian troops had landed in the southern port cities of Odessa and Mariupol. It also reported staff and passengers evacuating Kyiv's Boryspil International Airport.

WR Van Der Merwe spoke to journalist Nick Hedley about the effect of the Russia-Ukraine War would be on South Africa’s economy and diplomatic relationships.

This is in addition to other rising costs in South Africa right now. In 2022, the following costs have already increased, with more costs predicted to be announced.

Toll tariffs

On Wednesday 2 March, ECR Newswatch reported that motorists in South Africa would be forking out more for fuel and toll fees for those traveling across the country.

Motorists passing through the Mariannhill Toll Plaza will now have to fork out an additional 50 cents in fees.

• Tariffs have gone up to R13.50 for cars.

• Drivers of Class 4 heavy-duty vehicles will be paying R47.00.

Sanral says the price increases will go towards improving road infrastructure and operational costs. 

Electricity

An almost 10% increase in the price of electricity is already a concern, but consumers will be hit even harder in July when municipalities hike up their Nersa-approved tariffs. 

This means that the cost of electricity will go up by at least 15% depending on your municipality. 

Matthew Cruise of Hohm Energy joined WR Van Der Merwe on Business Watch to discuss.

Sugar Taxes

The DA is calling for a debate on plans by government to impose a sugar tax on 100% fruit juice. It says South Africa may become one of the few countries in the world to tax natural sugar in fruit juice.

ECR Newswatch reports that, currently, the Health Promotion Levy is applied to drinks that have added sugar.

DA Shadow Minister of Health Michele Clarke believes 100% fruit juice should be exempt.

Dr. Johnny Van Der Merwe joins WR Van Der Merwe on Business Watch for an in-depth discussion on how the Russia-Ukraine War might affect food prices in South Africa.

More resources on the Russia and Ukraine War:

• Deadly air strike hits Kyiv ahead of new Russia-Ukraine talks
• Oil tops $100, havens rally, stocks drop as Russia invades Ukraine
• 'Devastating' consequences to Ukraine invasion: UN refugee chief
• Ukraine wants SA to impose sanctions on Russia
• Russia, Ukraine conflict 'already comes at cost to SA'
• Russia risking European peace with 'Cold War demands', says Berlin
• Warning over bread price due to Russia-Ukraine conflict
• SA fuel prices ‘set to soar’ following Russia attack on Ukraine
• Terrified Durban couple in Ukraine risk their lives to escape Russia's missiles
  
• In conversation with South African Nikki de Villiers in Ukraine
  
• Agri economist explains Russia-Ukraine war's effect on SA food prices