Steep fuel hike another body blow to consumers

Petrol and diesel are going up by more than R2 per litre this week. File photo.
Image: Vladyslav Starozhylov/123rf

South Africans are reeling in disbelief that, amid the current economic crisis, a steep fuel hike kicks in at midnight on Tuesday.

On Monday, the department of mineral resources & energy announced the price of 93 octane petrol will go up by R2.37/l, 95 octane will go up by R2.57/l, low sulphur 50 ppm diesel by R2.30/l and 500 ppm diesel by R2.31/l. Illuminating paraffin will increase by R2.21/l.

The price hikes are all the steeper due to the petrol levy holiday falling from R1.50 a litre to 75c.

This latest round of fuel price hikes comes on the back of severe load-shedding, with Eskom resorting to stage 6 throughout the week.

Border-Kei Chamber of Business executive director Lizelle Maurice called the hike “ridiculous” and said it would severely affect businesses.

“The cost of logistics will increase, which will affect the price of commodities.

“Those who may want to keep their prices the same will have to absorb the increase to stay competitive, but it will affect the profitability of the organisation.

“Workers who use public transport may be subjected to increased taxi fares.

“The family at home will be affected, as there will be less disposable income.

“People who use generators during load-shedding will also be affected.”

Black Business Forum president Luthando Bara called the increases a “devastating blow” for small businesses.

“Businesses have had to swallow a lot of these costs and losses, so the idea of absorbing the fuel price increase is not appealing at all. It will be the death knell to many.

“Consumers are now more price-sensitive than ever and competition is fierce.

“It will not be possible to face this fuel price increase without hiking prices,” Bara said.

“What many people don’t realise is how petrol and diesel price hikes will push up the average cost in virtually every production cycle.

“We can expect increases in costs across entire supply chains — from the price of raw materials to the cost of transporting them to factories, in manufacturing costs to increased distribution costs in getting finished goods to distribution centres and retail outlets.

“The BBF suggests that one way of softening the blow for small and medium enterprises is the automation of their supply chains to enable them to share facilities, including transport and warehousing.”

Southern Cross Cruises owner and skipper John Barry said his margins were tight as it was and this increase would only add further strain.

“We can’t push our prices up, because people have already had a knock from Covid-19.

“Cruises are recreation, they’re not something people have to do.

“They don’t fall under essentials so I can’t push prices up. You have to take the brunt of it until you are forced to close down.”

The company was seeing an increased number of cancellations from customers who could no longer afford to go cruising.

As a result, Barry said, they were having to make more trips with fewer customers to make up the difference.

“You can’t give a product of less quality to the customer. We have to find ways to make it more appetising.”

The East London SPCA has also been badly affected, with general manager Andries Venter saying they had to seriously examine how they operated.

It was hard trying to find ways to reduce costs without negatively affecting their ability to serve the community.

“We don’t want to reduce our call-outs but we are having to fundraise more to pay the fuel bills.

“It is costing us hugely but we haven’t cut down our services.”

Where it used to cost the SPCA staff between R500 and R600 to fill their vehicles, it was now costing them over R1,000.

“So instead of doing three trips a day, we’ve had to look at doing one trip but getting as much done in that trip as possible. It does involve a lot of planning.

“We don’t know how it’s going to work in the long term but right now we are biting the bullet.”

M4 Couriers member Pieter Moolman said they had already increased their prices once this year because of previous fuel price hikes and now businesses had no choice but to pass the costs on to their customers.

“Eventually it ends up costing the consumer more.”


By Matthew Field