Durban - The Road Freight Association, trade union Uasa and an economist have raised concerns about the impact of the recently announced massive increase in the petrol and diesel price that will come into effect from midnight.
Abigail Moyo, spokesperson for Uasa, said that as of midnight, both grades of petrol will increase by 171c/litre while both grades of diesel will increase by 276c/litre and 284c/litre respectively.
“Illuminating paraffin is also set to increase by 278c/litre and LPG will increase by 226c/kg. The considerable hike for all fuels will leave workers and motorists desperate for extra cash to get to work and back.”
Moyo added that although the general inflation rate is moving in the right direction, the higher fuel prices will counteract any relief it may bring.
“Uasa encourages its members and fellow South Africans to adopt fuel cost-saving precautions by getting to the pumps before midnight today to save the little they can before the new price comes into effect.”
Gavin Kelly, CEO of the Road Freight Association, said that at midnight on Tuesday, the cost of diesel for transporters will increase by R2.76 for 500ppm (R2.84 for 50ppm).
“That will raise inland pump prices to R23.05 and R23.28 respectively. The price of both grades of petrol – 93 and 95 – will increase by R1.71c/litre.The Central Energy Fund (CEF) attributed the price hikes to rising international fuel prices and the weakened rand.”
Kelly added that these prices were last seen in June 2022. “Road freight transporters use both petrol and diesel, but diesel is the main fuel in most road operations. Once fuel prices increase, transporters will need to increase their pricing to cover the increased cost of diesel.”
Kelly said that while this sounds like an easy or simple process, there will be transporters who will not be able to increase costs.
“Either they are contractually bound or they just price themselves out of the market, and thus might not be able to carry on running the business.”
Kelly added that the continuous increases in the price of diesel inevitably drives the cost of transport and logistics up.
“Roughly 85% of all goods moved through and around the country having a road leg at some part in the journey, there will be increases to consumers (you and I), as the cost to transport goods increases.”
Dr Ntokozo Nzimande, a senior lecturer in the Department of Economics at UCT, said that the fuel and diesel increase will have a negative and significant impact on food prices and prices in general.
“Most businesses use diesel to operate their machines, and to move goods around the country and beyond. Hence, fuel price hikes increase costs for businesses, which they, in turn, pass on to consumers.”