Durban — A trade union and road freight association agree that the rising petrol and diesel prices could strain consumers closer to the festive season.
It follows the announcement by the Department of Mineral Resources and Energy that 93 and 95 unleaded petrol (ULP) and LRP will increase by 51 cents, diesel by R1.42 per litre and illuminating paraffin by 77c from Wednesday (today). The Central Energy Fund (CEF) said the prices were pushed up by a weaker rand which was impacted by rising international fuel prices.
According to AA records, in 2020, the petrol price increased to R13.88 for 93, R14.59 for 95 and R12.29 for a litre of diesel. Diesel has doubled since December 2021.
The United Association of SA (Uasa) said the price increase of all grades of petrol was a bitter pill to swallow for workers planning their festive season.
Abigail Moyo, spokesperson at Uasa said the knock-on effect of the higher diesel price would put transporters and commuters under extra pressure.
“The consumer will ultimately pay increased prices for transported goods and for public transport as goods and service providers will make sure their businesses stay afloat.
“Car owners will have to pull their belts tight against the onslaught of the increases.
“With the festive season around the corner workers will have to decide whether it is still viable to go on holiday or visit family. January, with its high costs of school fees and uniforms for parents of learners, is just around the corner,” said Moyo.
She further called on stakeholders and business owners to consider consumers in these “difficult” economic times.
Meanwhile, Road Freight Association CEO Gavin Kelly said the road freight transporters would need to increase their pricing to cover the ever-increasing cost of diesel, adding that there were transporters who would not be able to carry on.
Kelly said this would be driven by the transporters’ need to fund operations (the use of fuel) while only being paid months after the work has been done in some cases up to three months afterwards.
“In the meantime, the next load needs to be moved, and so on, and that all needs fuel for the vehicles. We do not have a limitless reserve of cash to continue the high level of fuel expenditure against the delayed payment for work already done,” said Kelly.
He said they were beginning to see that more businesses in stress were going to reduce volumes to be transported or even curtail stock movement , depending on consumer consumption levels.
“Transporters will feel this impact on their businesses. Many transporters will not be able to muster the guarantees required for purchasing fuel on credit because customers take up to 90 days to pay after the transport has been provided,” Kelly said.
He said there was a possibility of more business closures, unemployment, less business and revenue driven through the transport sub-sector industries, and higher prices at the till including many consumers staying at home to cut the lavish spending associated with the festive season.
Daily News