Relief as fuel price drop announced
THE Road Freight Association (RFA), the taxi industry and a civil society organisation that tracks food prices welcomed the fuel price cuts announced yesterday, but they warned it would be some time before consumers would see relief across the value chain for food and other services impacted by the fuel prices.
The Department of Mineral Resources and Energy said that the price of both grades of petrol would be slashed by R2.04 per litre, while the price of diesel 0.05% and 0.005% sulphur would drop by 56.34 cents per litre and 46.34 cents per litre respectively. The wholesale price of illuminating paraffin would go down by 82c per litre.
The department said lower prices were due to lower international oil prices and the stronger rand during the period under review. However, the decreases were less than what had been forecast, especially for diesel.
The RFA said that the decrease in the fuel prices was a welcome relief for the trucking industry and consumers.
RFA CEO Gavin Kelly said any decrease in the cost of fuel would have a tremendous positive effect on transport costs and supply chains.
“While the price of fuel has dropped, the effects on the logistics chain should be felt in the coming quarter and will certainly make life slightly easier for consumers towards the end of the year.
“This will go a long way to placing downward pressure on inflation as well as the cost of logistics within South Africa, which is one of the key drivers of the items measured in the inflation basket.”
Chris Moodley, the director of freight company KZN Customs Clearing and Forwarding, said that the fuel price decrease came at a time when the transport industry needed it the most.
“Transport costs have been severely impacted by the rising diesel costs, making it more expensive for the consumer to shop for day-to-day food supplies and other important items.”
Mervyn Abrahams, the programme co-ordinator for civil society group Pietermaritzburg Economic Justice & Dignity Group (PMBJED), said that any decrease in the fuel price was welcome.
“The good news is that in the long term a big drop in the fuel price will bring about a drop in food prices. However, this can take about two or three months to filter into the system.”
However, Abrahams added: “There are so many other increases that consumers are faced with, such as Eskom’s tariff increase and the interest rate hike. It means that consumers’ money will still have to pay for other increases.”
Abrahams said that the PMBJED would be monitoring food prices after the fuel price drop. “We urge consumers to be aware and watch if retailers are reducing food prices.”
Spokesperson for the SA National Taxi Council (Santaco) in KwaZulu-Natal, Sifiso Shangase, said the organisation welcomed the decrease in the fuel prices, but urged the government to come up with long-term solutions.
“We need a more permanent solution so that the price of fuel remains affordable so that we as the taxi industry can sustain our livelihood. We call for government intervention to reduce the fuel levy as this will cause a further decrease in the fuel price.”