Durban - The Road Freight Association (RFA), the taxi industry and a civil society organisation that tracks food prices welcomed the fuel price cuts announced yesterday, but they warned it would be some time before consumers would see relief across the value chain for food and other services which are impacted by the fuel prices.
The Department of Mineral Resources and Energy said that the price of both grades of petrol will be slashed by R2.04 per litre, while the price of diesel 0.05% and 0.005% sulphur will drop by 56.34 cents per litre and 46.34 cents per litre respectively. The wholesale price of illuminating paraffin will go down by 82c per litre.
The department said lower prices were due to lower international oil prices and the stronger rand. However, the decreases were less than what had been forecast, especially for diesel.
Mervyn Abrahams, the programme co-ordinator for civil society group Pietermaritzburg Economic Justice & Dignity Group (PMBJED), which tracks the price of a basic food basket across different cities on a monthly basis, said that any decrease in the fuel price is welcome.
“Fuel is a major input cost for most goods and services. The good news is that in the long term a big drop in the fuel price will bring about a drop in food prices. However, this can take about two or three months to filter into the system.”
Abrahams added that the fuel price cuts would not necessarily mean consumers will have more money in their pockets.
“There are so many other increases that consumers are faced with, such as Eskom’s tariff increase and the interest rate hike. It means that consumers will still have to pay for other increases.”
Abrahams said that the PMBJED would be monitoring food prices after the fuel price drop.
“We will definitely be monitoring the food prices over the next few months as there should be a drop in the prices. We urge consumers to be aware and watch if retailers are reducing food prices or if they are remaining the same.”
The RFA said that the decrease in the fuel prices was a welcome relief for the trucking industry and consumers.
RFA CEO Gavin Kelly said any decrease in the cost of fuel – in particular larger decreases – will have a tremendous positive effect on transport costs and supply chains.
“Whilst the price of fuel has dropped, the effects on the logistics chain should be felt in the coming quarter and will certainly make life slightly easier for consumers towards the end of the year.”
Kelly added that with fuel prices dropping, there should also be a boost for the local tourism industry to boot.
“South Africans will now pay less for fuel than they did in June 2022. This will go a long way to placing downward pressure on inflation as well as the cost of logistics within South Africa, which is one of the key drivers of the items measured in the inflation basket.”
Chris Moodley, the director of freight company KZN Customs Clearing and Forwarding, said that the fuel price decrease comes at a time when the transport industry needed it the most.
“Transport costs have been severely impacted by the rising diesel costs, making it more expensive for the consumer to shop for day-to-day food supplies and other important items.”
Spokesperson for the SA National Taxi Council (Santaco) in KwaZulu-Natal, Sifiso Shangase, said the organisation welcomed the decrease in the fuel prices but urged the government to come up with long-term solutions.
“We welcome the decrease, but how long will it last? We need a more permanent solution so that the price of fuel remains affordable so that we as the taxi industry can sustain our livelihood. We call for government intervention to reduce the fuel levy as this will cause a further decrease in the fuel price.”