Kick us when we are down
BAD NEWS: SOARING PRICES OF DIESEL, PARAFFIN WILL IMPACT COST OF LIVING, SAY EXPERTS
With load shedding here again the easing of the petrol price came as a little relief, but experts warn the soaring prices of diesel and illuminating paraffin will add to consumer woes as they spill over to other industries that are heavy on diesel like agriculture and Eskom.
While petrol price drop came as a relief, stage 2 load shedding will dampen mood.
South Africans are being kicked while they are down as, shortly after a meagre 12c reduction in petrol was announced together with a 98c increase in diesel yesterday, Eskom announced stage 2 load shedding until next week.
And the soaring price of diesel will further squeeze Eskom’s already parlous finances, because it spends hundreds of millions of rand a month on open-cycle gas turbine generators during load shedding to avoid a complete collapse of the electricity grid.
Mineral and Energy Resources Minister Gwede Mantashe yesterday morning announced a slight decrease in both grades of petrol and a hefty increase in diesel and illuminating paraffin.
Then, in the afternoon, Eskom spokesperson Sikonathi Mantshantsha said the utility implemented stage 2 load shedding until Monday, after a generation unit at Lethabo, Tutuka, Ingula, Drakensberg, Arnot, as well as two units each at Hendrina and Matla power stations suffered breakdowns.
“We currently have 3 875MW on planned maintenance, while another 15 067MW of capacity was unavailable due to breakdowns,” he said.
Political analyst Dr Piet Croucamp said the price of diesel was a disaster.
“It has a huge impact on the costs of business and agriculture that spills over to other industries that are heavy on diesel, like the mining industry and Eskom,” he said, adding that Eskom used diesel to avoid load shedding.
“It was not going well with us now, nor will it go well for the foreseeable future,” he said.
TLU SA chair Bertus van der Westhuizen said the diesel increase was bad news for farmers, who started harvesting and sifting grain.
“We use millions of litres of diesel, but we will not be able to continue like this,” he said.
“If you are harvesting, there is only one way to harvest and it is to run the combine. You have to drain the grain, process and transport it to the silos.”
Running a combine harvester for a day-and-a-half costs about R20 000, Van der Westhuizen said.
“It’s not just the farmers who are in trouble, the country is. If we push up the market prices to make a living, what will the costs be of the food on the shelves? Farmers are not earning profits anymore,” he said.
The Automobile Association (AA) spokesperson Layton Beard said the price increases in diesel and illuminating paraffin would impact the cost of living.
“Naturally, the decreases in petrol are welcome, offering some relief in the short-term. Of concern, however, are the high increases to diesel and illuminating paraffin, which will put extra financial pressure on consumers already struggling to make ends meet,” Beard said.
He said the price of illuminating paraffin was worrying because the fuel was used for cooking, heating and lighting and came as South Africa entered the winter season.
“The cost of diesel was now in record territory, which will impact the economy as a major input cost in the manufacturing, road freight, agricultural and mining sectors,” he said.
Beard said increases were eventually passed on to consumers.
National Taxi Association spokesperson Theo Malele said the decrease would bring some relief for operators. “We would be happier if the drop in prices would come in thick and fast.
“The only solution was to review the composition of the fuel price in relation to all the frills attached to fuel.”
Public-Private Transport Association spokesperson Vhatuka Mbelengwa said a decrease in the cost of petrol was always welcome.
“We wish the decreases could be as drastic as when the prices increase,” he added.
Mbelengwa said they hoped to see some stability in fuel costs to bring stability to those operating transportation-based businesses. –