Cape Town - While economists predict the recent petrol price drop is expected to bring 1.5 percent more disposable income to consumers’ pockets, public transport commuters won’t be enjoying a cheaper ride.
Sa National Taxi Association manager Bafana Magagula explained that because the taxi industry views petrol fluctuations as being temporary, it will not be adjusting prices with the new petrol price.
“This new price in petrol is not permanent and should we change our prices, and the petrol price changes in the next three weeks, it will be confusing for our customers. We will amend prices again in June or July, depending on how the interest rate looks,” he said.
Despite an expected further 90c a litre drop in petrol predicted for next month by Econometrix economist Lauren Campbell, commuters using Golden Arrow bus services will also not see an adjustment in prices.
Golden Arrow Bus Services spokeswoman Bronwen Dyke said the price of petroleum is unpredictable and it is therefore difficult to make long-term projections.
“The company does not adjust fares based solely on the cost of fuel as there are other items which also form part of the overall cost structure.
“In motivating fare adjustments to the Western Cape provincial Department of Transport, Golden Arrow has had to take into account decreasing budgetary allocations for passenger subsidies, as well as annual wage increases which have averaged around 10 percent for the last three years.”
According to Dyke, Golden Arrow has to contend with other input costs associated with the importing of automotive spares and supplies in an exchange rate environment in which the local currency is at a relative disadvantage.
“For these reasons, the company generally opts for annual increases rather than constant adjustments, which would not necessarily favour the consumer anyway,” she said.
Trevor Hattingh, spokesman for the National Consumer Commission (NCC), said as petrol affects all commodities and services in the market, it is expected that a reduction in its price would consequently have similar effects on all commodities and services in the market place.
“However, taxi prices are not regulated by government. These prices are not competitive and are normally determined by the taxi operators. The NCC does not regulate pricing.”
According to Hattingh, because the retail and food market is so competitive, it is assumed that forces of demand and supply, among other things, apply to ensure that consumers get competitive prices.
He said the NCC normally intervenes in a market only if there is sufficient evidence of consumer complaints and, so far, the commission has not received any complaints.
Competitive prices won’t also guarantee lower food prices.
Economist Mike Schussler said food consumers can expect a stabilisation in food prices rather than a dip due to the petrol price.
Cape Times