Another fuel hike to hit consumers pockets hard and increase taxi fares

29 April 2019 - 11:13
By Penwell Dlamini
Another fuel hike is expected at midnight
Image: Alon Skuy Another fuel hike is expected at midnight

Consumers will dig deep into their pockets as the price of all grades of petrol will go up by 54 cents a litre from midnight on Tuesday April 30.

Yesterday, the department of energy made the announcement of the bad news which is expected to hit consumers hard.

Automobile Association of SA spokesperson Layton Beard said the increase was indeed “hefty”.

“It comes on the back of a number of increases that we have already had this year. It is tremendously bad news for consumers. It is definitely going to have a trickling effect on the prices of different goods and services. The agricultural sector uses diesel for their equipment on farms. There’re people who use petrol to transport their goods across the country. They will absorb those costs to an extent but then pass them on to consumers. Things will undoubtedly become [more] expensive,” said Beard.

He added that the taxi industry would also have to increase fares as the cost of fuel hits its pocket.

The department of energy said the fuel hike was due to local and international factors.

“International factors include the fact that South Africa imports both crude oil and finished products at a price set at the international level, including importation costs like shipping costs,” the department  said.

“The rand on average has strengthened slightly against the US dollar from R14,3871 to R14,1401 per dollar. The settling of contagion risks from emerging markets provided a foundation for the rand's strengthening trend. This decreased the contribution on the basic fuel price of petrol, diesel and illuminating paraffin by about 13 cents a litre.”

However, the department said, the oil prices rose to the highest level in almost six months as the US government decided to eliminate sanction waivers that allowed buyers to import Iranian crude oil.

Based on these and other factors, the department said all grades of petrol will rise by 54 cents a litre. Diesel (with 0.05% sulphur) will increase by just a cent while one with 0.005% sulphur will remain unchanged.

The wholesale price of Illuminating paraffin will increase by 3 cents a litre while the (SMNRP) single maximum national retail price for illuminating paraffin will rise by 4 cents a litre.  The maximum retail price for liquid petroleum gas will surge by 84 cents per kilogram.

Beard said motorists will have to monitor how they use their vehicles to absorb the fuel hike.

“The alternative could be driving in car pools…Leaving earlier for work and returning later to miss traffic. You’ve got to budget to ensure you have enough money for fuel. You will have to cut back on other expenses.”