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Plea to business to not pass on fuel price hikes to consumers and commuters

Oct 4, 2018
Plea to business to not pass on fuel price hikes to consumers and commuters

Energy Minister, Jeff Radebe, has appealed to the business sector to withhold passing on the increasing costs of fuel to the consumer.

This week, the Southern African Bus Operators Association (SABOA) highlighted that not only does the 8.6% diesel fuel price increase (from R14.40 per litre to R15.64 per litre) impact on keeping buses on the road, it also combines with labour cost surges to put the industry under immense cost pressure.

SABOA said it will be compelled to pass on the increases to passengers.

“You would recall that in the month of September, we intervened in order to alleviate the fuel price increase, where the price of petrol did not go up. We want to appeal to the private sector to show some generosity by not passing on the cost to consumers because we know the price of bread and petrol has a devastating impact, especially on vulnerable members of the South African society. This is our appeal,” the Minister told SAnews on Wednesday.

The Minister, who visited the Government Communication and Information System (GCIS) headquarters in Tshwane, was speaking following this week’s record high petrol price increases.

The Department of Energy on Monday announced that a litre of petrol 93 (ULP and LRP) will rise by 99 cents, while that of 95 (ULP and LRP) will increase by R1.

Motorists in Gauteng are now paying R17.08 for a litre of 95.

Meanwhile, both grades of diesel -- Diesel 0.05% and 0.005% Sulphur -- have seen increases of R1.24 a litre.

In September, the fuel price remained unchanged following Radebe’s announcement of a 4.9 cents a litre increase in the retail margin of petrol.

At the time, it was announced that the 4.9 cents a litre increase would be ring-fenced for the wages of the forecourt staff. The 4.9 cents a litre salary increase is in line with the Motor Industry Bargaining Council (MIBCO) agreement of 18 November 2016.

Government, Radebe said, is troubled by the rising fuel price, especially the effect it has on the cost of living and doing business in the country.

He said the impact of a fuel price increase is multiplied through the cost of transport, goods and services. This puts enormous pressure on households, farmers, businesses, investors and the delivery of services.

On Wednesday, Radebe said the South African economy was currently going through a difficult period.

“We would like to encourage all our motorists to be very circumspect when they plan their trips to moderate their driving habits so that they can save fuel. These are difficult times and as President Cyril Ramaphosa has highlighted, we need to stimulate the economy through this recovery and stimulus package that the President announced,” he said.

President Ramaphosa will later this month host an investment conference to ensure that more than a trillion Rand in investment comes to South African shores.

Radebe said South Africa is a net importer of crude oil.

“We are very hopeful that with this investment conference the President will host on 25 and 26 October, we will be able to get investment into the economy, of which a significant portion will be for oil and gas.

“[This is] to ensure that we [can] be self-sufficient and that we don’t continuously become victims of the dollar exchange rate and crude oil prices that are now over $80 per barrel,” Radebe said.

Government adjusts the fuel prices at the beginning of each month informed by local and international factors. The approach of regular fuel price adjustment smooths out the differences in fuel price for stability in the economy, which is a delicate balance.

´We are committed to managing our economy in a responsible, balanced manner,” said Radebe. – SAnews.gov.za

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