Consumers to feel heat as fuel price increases
‘Companies will find running costs too high’
The fuel price increases may lead to job losses and business closures as diesel costs have almost doubled in 11 months.
Road Freight Association CEO Gavin Kelly said the diesel price hike would affect jobs in the freight sector, which is involved in the transport of food and other products. The increases were implemented at midnight.
The department of mineral resources said on Friday that the petrol price, both 93 and 95 ULP and LRP, will increase by 51c a litre, while diesel will increase by nearly R1.45.
The hikes are as a result of higher prices for international petroleum products as well as a weaker rand performance.
Paraffin will increase by 77c a litre.
“Diesel has doubled since December 2021. Road freight transporters use – in the main – diesel for their vehicles. They need to increase their pricing to cover the ever-increasing cost of diesel, and there are transporters who will not be able to carry on,” Kelly said.
“This will be driven by the transporters’ need to fund operations while only being paid months after the work has been done…”
He said the continuous increases in the price of diesel inevitably drive the cost of transport and logistics up, ultimately affecting consumers and leading to business closures.
“Whether we like it or not, the continuous increases in the price of diesel inevitably drives the cost of transport and logistics up – step by step – and, with roughly 85% of all goods moved around SA having a road leg at some part in the journey, there will be increases to consumers, as the cost to transport goods increases.
“Fuel breached the 55% mark in daily operating costs during the third quarter and now as we head into the final month of 2022 [it is] already hovering around 60%. That’ sa cost to company that cannot be borne by the company.
“You and I will pay more for everything. From food to fuel, from clothing to electronic goods and everything in between. More business closures, more unemployment, less business and revenue driven through the transport sub-sector industries, and of course, higher prices at the till.”
The UASA trade union said the increase is a bitter pill to swallow for workers.
Spokesperson Abigal Moyo, who called on business owners to consider consumers in these difficult economic times, said the knock-on effect of the higher diesel price will 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, workers will have to decide if it is viable to go on holiday or visit family. January, with its high costs of school fees and uniforms,” is around the corner.”
sibiyan@sowetan.co.za