South Africa Announces Steps to Aid Economy; Fuel Prices Increased 15%
The government announced major steps Friday to shore up the economy, including a 15% increase in fuel prices and higher surcharges on luxury imports.
Consumer and business groups complained that the increase in fuel prices would halt a recent decline in the inflation rate, which has fallen from 17% in 1987 to the current 12.4%.
The Black Consumers Union said the fuel price increase would be a particular hardship to poor blacks who rely on lamp fuel to light homes without electricity.
George Bartlett, the government’s deputy minister of economic affairs, said the price for high-octane gasoline will increase by 15.9% to about $1.60 a gallon. Similar increases in low-octane gasoline and other fuels will be introduced.
Finance Minister Barend du Plessis and Economic Affairs Minister Dawie de Villiers announced a separate package of economic measures, including restrictions on installment purchases to curb borrowing and higher surcharges on imports such as motor vehicles, tobacco, televisions, coffee, tea and jewelry.
On many items, the existing 10% surcharge will be raised to 60%.
The ministers said the steps had been caused by high domestic spending, which placed pressure on interest rates and led to increased imports.
If consumers curtailed spending, they said, the government could avoid “further and more painful steps.”
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