Brace for biggest fuel price hikes
SOUTH Africa may experience the biggest fuel price increase in the history of the country next month, according to the mid-month unaudited data predictions of the Central Energy Fund released last week by the AA.
This comes on the heels of Minister of Energy Jeff Radebe instituting a once-off reprieve from paying the entire 25c a litre increase this month.
The AA said a combination of a spike in international oil prices and a huge swing in the rand/dollar exchange rate influenced the prediction.
Diesel users will be hit hardest, with a possible price increase of R1.38 a litre, pushing diesel to within a whisker of R16 a litre, while petrol users could be paying R1.12 more a litre, with illuminating paraffin costing R1.17 more.
If these increases materialise, it will push the price of 93 unleaded octane fuel inland close to R17 a litre, off a January price of R14.20 – a total increase of around 20% year-to-date.
AgriSA’s head of economics and trade, Dr Requier Wait, said a large fuel price increase would affect the agriculture industry. “Farmers are price takers, a rising diesel price will increase farmers’ input costs and lower the margin they can earn on their produce.”
He said South African farmers were resilient. “Farmers will continue to target efficiencies to mitigate rising input costs. However, the rising costs could have a more adverse impact on producers who can’t achieve the necessary efficiencies and economies of scale.
National Taxi Association spokesperson Theo Malele said not only would the taxi industry suffer but so would commuters. “The fuel price increases are causing a lot of problems for the poorest of the poor, who were previously disadvantaged and are still disadvantaged, while politicians are getting fatter by the day,” he said.
He said there was a need to put in place austerity measures to offset the cost of fuel increases.
Visvin Reddy, national convener of People Against Petrol and Paraffin Price Increases, said that as long as the country determined its fuel prices by the cost of crude oil and value of the rand, they would continue to rise.
Department of Energy spokesperson Lerato Ntsoko said the department would comment once the official audited fuel price statement for next month had been issued by the department.