Small businesses struggle to cope as fuel prices continue to rise

Entrepreneurs and small business owners are thinking of laying off staff or closing their businesses as petrol prices continue to rise.

Financial and Fiscal Commission (FFC) chair Dr Nombeko Mbava said smaller businesses were generally more vulnerable to periods of lower consumer spending.

“To maintain their profit margins they will have to either increase productivity, reduce their operational costs or increase the prices of the services offered,” she said.

Mbava said reducing costs could result in letting workers go, adding to unemployment.

“Costs can shift to consumers which puts greater pressure on consumer budgets and reduces purchasing power and living standards,” she said.

She said other options were limiting the range within which they conduct their business.

Gerhard Habig from Pass Co Driving school said the price increase was a massive blow for his business.

“It is not like we can work from home,” he said. Habig said he now uses about R500 petrol a day compared to the previous R300. He said he was going to have to increase his service prices due to the fuel price increases.

“There is no other way,” he said. Habig said he said he had five to six clients a day.

“We easily drive about 400 kilometres a day. We drive from 6am to 6pm every day,” he said. Habig said if fuel prices continued to rise, he would have no choice but to close his driving school.

“Everything is increasing: petrol and food, but not our income,” he said.

He said he was worried people will start learning to drive at home to try to cut costs.

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Gold Leaf Garden Service owner Waldo Sealey said he will have to lay off staff after yesterday’s fuel price hike.

“I use up to R30,000 petrol a month on two bakkies and cutting equipment. The increases have raised our costs by more than R5,000,” he said. Sealey said he was now working at a loss.

“We are working until 6pm in the winter just to try to keep our heads above water,” he said. He said he will have to let go of two of his 10 staff to survive the next few months.

“We cannot cut down on petrol, we use it to work, electricity is unreliable. So the only thing I can do to make ends meet is to reduce my staff,” he said.

Sealey said he had to get more work done with less manpower to try to break even.

Faried Jantjies, who owns a small shuttle service, said: “It now costs R1,200 to fill up a tank, compared to R700 a tank two years ago.” He said a full tank only lasted three days.

“Unfortunately, my fares will have to go up because we have to be able to put food on the table,” he said.

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MasterDrive CEO Eugene Herbert said basic driving adjustments could help with fuel consumption:

• Anticipate changes to traffic conditions and minimise unnecessary braking and acceleration.
• Reducing speed by 20km/h can reduce fuel consumption by 20%.
• Plan your route and use traffic apps and alerts to avoid traffic jams and congestion.
• Keep your RPMs around 3 000 as it can also reduce your consumption by 20%.
• Regular maintenance improves fuel efficiency.
• Minimise use of the aircon.

– marizkac@citizen.co.za