Category: General

In this article you will learn how the fuel price affects the price of eggs. You will also learn why this is not alarming for GroSpace Partners. Lets start off with assessing the price of eggs, shall we:

What is the price of eggs?

GroShop vendors can buy boxes of eggs at R555 and then sell these boxes of eggs to retailers through their GroShop at a recommended price of R610.50. This price increase is directly caused by the increase in fuel levies

What has the price of fuel got to do with the price of eggs?

The price of feed for our farmers went up from R295 to R330 on Wednesday the 1st of June. This is a direct price hike of 11%. This came as a result of the fuel increase of R3 on the 1st of June from R21.80 to R24.80 which represents 12%. Where is the extra 1%? Read more below about VAT.

What has this got to do with the price of eggs?

The increase in fuel has a direct correlation with the price of feed. A box of eggs which was previously costing GroShops R500 is now R555 at cost. Eggs are zero rated for VAT.

The recommended wholesale of a box of eggs to retailers was R550 last week and now it should be 11% higher at R610.50 per box. This was caused by a fuel increase of 12%.

Why has the fuel price increased so much?

This is how the government is taxing people. Fuel is comprised of a 50% tax. Basically the Goverment is taxing the South African people for all of the handouts the government gave during 2020 and 2021 to support COVID relief. Ths is the backlash casued by the closure of the South African economy. This is called a tax deficit. Politicians do not enjoy tax deficits because this leads to fewer jobs and lower salaries. This is where the reserve bank steps in.

What does the reserve bank have to do with higher fuel prices?

The reserve bank prints money to compensate for the shortage of funds in the government accounts. When the economy was closed, the reserve bank handed out money that the reserve bank printed. This is called quantitative easing. Quantitative easing causes an over supply of money in circulation. This means that there is more money in circulation than there should be to balance out the reserve bank’s accounts.

How does the reserve bank balance the accounts?

The reserve bank increases the repo rate. The repo rate has increased by 0.5%. This forces government to pay back higher tariffs for the money that the government lent from the reserve bank. The money that was printed by the reserve bank was handed out to the people. The government increases the tax income by increasing VAT and fuel levies. VAT was increased by 1%. Fuel has increased by 12% this month.

The Minister of Finance announced in February 2018 that Value Added Tax will increase from 14% to 15%. This increase took effect on 1 April 2018. All transversal contract prices have been adjusted and contract circulars have been updated accordingly to reflect the 15% Value Added Tax increase. 01 Nov 2018

http://www.treasury.gov.za/divisions/ocpo/ostb/contracts/VAT%20INCREASE%20NOTICE.pdf

Over the past 12 years the price of a litre of fuel has more than doubled, from R10.43 for 93 octane petrol at the time. Now, in what must surely be one of the toughest financial environments in recent times, we face paying more than R25/lafter an increase of between R2.27 and R2.36 per litre for petrol, which is on the cards from June 1.Fuel increased fuel levies by 12%

https://www.businesslive.co.za/bd/opinion/2022-05-31-neil-roets-whatever-the-fuel-price-hike-it-will-be-a-catastrophe/

How does closing the economy affect the government

When the economy is closed, the government makes no money. All of the tax that would have been earned from fuel is now being reclaimed through higher fuel prices. We are going through an economic collapse and it is time to invest in sustainable farming.

What do I do to avoid this catastrophe?

Farm the GroSpace way – it’s time to lower our dependence on petrol and diesel.

Secure your future sustainably.