South Africa’s rising fuel prices are set to hurt consumers far beyond just filling up their car’s tank.
This is according to a report by MyBroadband, which collated information that pointed to:
- R20 per litre of petrol being a “realistic scenario” in 2021.
- The logistics industry passing on fuel price hikes to their customers.
- Fuel price hikes, along with electricity price increases, being a top source of upward inflationary risk.
The AA recently stated that paying R20 per litre for petrol before the end of 2021 was now a strong possibility.
This followed a predicted 98 cents per litre increase for 95 petrol for November, based on mid-month data released by the CEF.
The expected fuel price adjustments for November are as follows:
- Petrol 93 – Increase of 96 cents per litre
- Petrol 95 – Increase of 98 cents per litre
- Diesel 0.05% – Increase of R1.41 per litre
- Diesel 0.005% – Increase of R1.42 per litre
- Illuminating Paraffin – Increase of R1.42 per litre
It must be noted that these are not the official fuel price adjustments, and only predictions based on current CEF data.
In a report by the Sunday Times, Bidvest International Logistics business development director Maria du Preez said it is common within the logistics industry to add a fuel surcharge to deal with inconsistent fuel prices.
“The fuel surcharge is adjusted monthly and passed on to our customers, who will pass it on to you and me,” said du Preez.
This is applicable to air freight, ocean freight, and road freight.
FNB economist Koketso Mano added that fuel and electricity inflation are the top sources of upward inflationary risk in the country right now.
Government must step back
The rapid rise in the price of petrol in the country has resulted in Solidarity calling on the South African government to lower fuel levies.
Solidarity said the government must release its grip on fuel prices by reducing the taxes on fuel and deregulating petrol prices, as is the case with diesel.
“Fuel price inflation seeps through to almost every other product in the inflation basket, and therefore it should be the very first place where the government can make a difference,” it said.
“As with almost all government interventions, its efforts to regulate the industry are to the detriment of everyone in South Africa.”