New diesel price will do damage

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IOL image petrol pump INDEPENDENT MEDIA File photo

Johannesburg - The 24 cents per litre increase in the diesel price will do more damage than the petrol price hike, the Cape Chamber of Commerce and Industry said on Monday.

“Business is particularly concerned because diesel is a basic input cost for agriculture and transport,” chamber president Janine Myburgh said in a statement.

“It affects the price of every item of food in the supermarket.”

She said private motorists would be able to reduce their travelling to save fuel but there was no escape for businesses.

The energy department announced last week that petrol would increase by 39 cents a litre and the wholesale price of all grades of diesel by 24.20 cents a litre this month.

The chamber's transport portfolio committee chairman Peter Hugo said the energy white paper of 1998 had recommended that taxes on diesel be reduced.

At the time, diesel was the cheaper fuel and according to the white paper this price differential promoted the use of diesel, which was a more efficient fuel and lowered input costs for productive activities.

However, the situation had worsened in the last 16 years and diesel became more expensive, despite it being cheaper to produce.

“This should make us review the way the diesel price is calculated and also the various taxes on diesel,” he said.

“The government thought there was a good case to reduce taxes on diesel in 1998 and we think there is an even better case now.” - Sapa

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