Home South African AA says the fuel price increase will be disastrous for everyone

AA says the fuel price increase will be disastrous for everyone

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The Department of Energy and Mineral Resources announced a massive fuel price increase on Monday, with effect from Wednesday

The recent fuel price hike has been described as disastrous for fuel users and customers. File picture: Kim Kyung Hoon / Reuters.

DURBAN – THE AA said the fuel increase would be disastrous for fuel users and consumers across the board.

This was after the Department of Energy and Mineral Resources announced a massive fuel price increase on Monday, with effect from Wednesday.

Petrol (both 93 and 95) will go up by R1.21 per litre, while the price of diesel (0.05% and 0.005% sulphur) will increase by R1.48/l. In addition, a litre of illuminating paraffin will cost R1.45 more.

AA spokesperson Layton Beard said: “A perfect storm of demand imbalances, refinery costs, natural gas price hikes and rand weakness will see the petrol price close in on R20 a litre in the run-up to Christmas.”

Beard said the association would continue to push for answers on how the levies incorporated into the fuel price were being allocated and managed.

“The government must also clarify the additional slate levy that was imposed on the fuel price; the slate levy has ballooned to R1.657 billion, and at the current level is clearly insufficient to reduce the deficit and protect South African fuel users from the interest burden on this amount.”

Beard added that fuel price had a direct bearing on an already weak economy. “All elements that comprise fuel must be fully interrogated to determine if they are necessary. Given that the fuel prices are now at record highs, such a review is overdue,” he said.

“Diesel, a major input cost in the manufacturing, agricultural and freight and transport sectors, is 30% more expensive than at the beginning of the year. Paraffin is now 35% more expensive than it was in January.”

SA National Taxi Council spokesperson in KZN Sifiso Shangase said the increase in fuel price would hurt the taxi industry.

“Taxi owners are facing serious difficulty due to the fuel price hikes. We only increase taxi fares by R1 in July annually, and yet the government has imposed a R1.24 increase per litre,” Shangase said.

Gavin Kelly, chief executive of the Road Freight Association, said the fuel price hike would make logistics more expensive in the country. “This could take transit freight away from us. There may be an immediate lull in transporting some items as transporters negotiate rates (especially those not on long fixed-term contracts).”

Economist Professor Bonke Dumisa said this was the largest fuel price increase in South Africa to date and it would be passed on to consumers.

He added that another increase was expected in December, leading up to Christmas.

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