‘Fuel price out of our hands’Comment on this story
With fuel prices rocketing to the highest level yet, the Department of Energy has acknowledged that the adjustment will have a negative effect on most South Africans but claims that it was out of their hands.
As from Wednesday, motorists will have to pay as much as 71c/litre more for 95 octane, 73c/litre for 93 octane and 51.9c/litre for diesel.
For many consumers there will not be much light at the end of the tunnel as they will be hit three times harder this month by the tolling system which comes into effect at the end of the month, the increase in fuel prices and municipal increases in electricity.
Minister of Energy Dipuo Peters said on Tuesday the department was committed to fulfilling its mandate ensuring that energy was accessible to consumers at the lowest possible rates, but several factors such as global economics, geopolitics, fuel levies and the road accident fund (RAF), to name a few, had an effect on the price increases.
Peters added that other factors which affected the increase in fuel costs were the closures of refineries in the US east coast region which had led to increased dependence on imports from Europe which again affected Mediterranean prices which contributed 50 percent to the basic fuel price (BFP).
Another factor included the increase of 20c/litre in the general fuel levy as well as 8c/litre for the RAF.
The vice-chairman of the Consumer Union, Clif Johnston, said the spate of price increases was very bad news for the consumer, more so because petrol, electricity and tolls were infrastructural in nature and the increases would work their way into everything they paid for.
“Even if you live in a shack without electricity and walk to work you will feel the impact in the form of increased food prices and other commodities.
“At this stage, there is very little the consumer can do, except to tighten the belt even more,” he said.
Johnston said many of the price increases were unavoidable and beyond reasonable control, but he believed there was one exception – e-tolling.
“This will have a significant impact on prices countrywide as the cost works its way through the infrastructure. For those in Gauteng it will be a double-whammy with some commuters facing up to R550 a month in toll fees alone,” he said.
He said it had been estimated that as much as half of the money collected from e-tolling would not go towards the roads, but would be absorbed in the collection process, its technical infrastructure and associated law-enforcement costs and, therefore, go wasted.
“It is unthinkable that such a wasteful and inefficient system should be inflicted on the province at a time when we can least afford it, especially when alternatives, such as a fuel levy, would have virtually no wastage,” he said.
The head of the department of economics at the University of Pretoria, Steven Koch, said it was difficult to predict oil prices for the future as many factors like US politics affected the price of Brent crude oil. “I don’t see a decrease in the petrol price for at least the next six months,” he said.
The marketing executive of Putco, Romeo More, said the increase in diesel was way too high.
“This is much more than the fair increase we have requested for the year,” he said. More said their annual increase of 8 percent, which amounted to a 20c/litre increase, was already in effect as from April 1 in Pretoria and would be in effect from July 1 in Joburg.
Emanuel Rammutla, a taxi driver based at the corner of Andries and Vermeulen streets, said taxis could not afford to raise their fares because they would lose their customers to Tshwane metro buses.
“One load is R140. When I get to Olifantsfontein, the petrol tank is empty and my profit is only R40. Nothing is going well. My wife left me three weeks ago because I could not support her financially,” he said.
Johnston added that the increase in the cost of everyday living might well mean more days without food towards the end of the month.