Harsh petrol shock looms

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Johannesburg - Not one, but two separate petrol price increases totalling 56c/l are set to hit motorists in less than a month, increasing the already record-breaking fee at the pumps.

Motorists are still reeling from the national petrol and diesel increase of 39c and 24c a litre respectively last month, which saw petrol rocket to a record R13.96 a litre.

Now, in a double whammy, the petrol price will go up another 36c/l for all grades at midnight, while levies on fuel will increase by 20c/l next month.

The Department of Energy said the price of crude oil and the weakening rand were the driving factors behind the increase.

During the latest fuel price review period of January 31 and February 27, the department said brent crude oil prices increased on average from $107 to $108.85 a barrel.

In the same period, the rand had depreciated from R10.67 to R11.02 against the dollar.

The fuel levy will increase by 12c/l and the Road Accident Fund levy will increase by 8c/l effective from April 2, which was announced in the Budget last week.

These increases, added to the customs and excise levy, which remained unchanged at 4c/l, means motorists will now pay a total of R3.32/l in levies at the pump.

Inland consumers will pay R14.32/l for 95 grade petrol, while coastal motorists will pay R13.95/l for the same grade by tomorrow.

By April 2, this will go up to R14.52/l and R14.15/l respectively, with levies.

At midnight 0.05% diesel will increase by 27.2c/l increase and 0.005% diesel by 28.2c/l.

Neren Rau, the chief executive of the SA Chamber of Commerce and Industry, said the fuel price would force business to make a difficult choice in pricing.

“Either consumers suffer or the business loses customers,” he said.

“There’s a lot of pressure that’s building in the system, because often it (cost) can’t be passed on to the consumer.”

Rau said there was largely a lack of options in transporting goods, with most businesses relying on road shipments as rail is “not quite” ready to handle it.

 

Petrol stations would also be negatively affected by increasing business costs as they have a fixed profit margin per litre regardless of the fuel price.

“It’s not an overly optimistic future we are facing,” said MC Lamprecht, the head of the Petroleum Retailers Alignment Forum.

“There’ll be declines in volume as people cut back on travelling; they think twice before travel (when the petrol price increases),” he said.

Consumers are likely to feel the pinch in many areas, as the combination of petrol increases and the e-tolls take their own toll on pockets.

Last Wednesday, Shoprite Checkers announced that e-tolls would add about R4 million a year to their distribution costs.

The company operates 529 food distribution trucks, which travel about 140 000km a day on average. - The Star



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