Petrol price increase hits local businesses hard
Last week's massive fuel price increase has the potential to bring some already overburdened consumers to their knees.
MBOMBELA – Since last Wednesday, motorists are paying 91c per litre more for petrol of all grades. Diesel cost 55c and 56c more. Paraffin increased by 67c per litre and gas by R2.26 per kilogram. The record-high increase that will certainly add to food and transport prices, according to economists, came at the peak of the Covid-19 pandemic’s third wave, which had already caused the closure of many businesses due to strict lockdown measures since last year.
Last week, economists warned the significant fuel price increase would have a knock-on effect on prices across many major sectors of the economy. But it is businesses, especially in the transport sector, that will feel the brunt of the price increase even more.
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One of the sectors that was hit the hardest is the tourism industry. Netto Maluka, owner of Mbombela Tours and Safaris, said they are not operating on a full-time basis.
“We don’t have business anymore. We are trying to work over long weekends when it is busier, but we are losing due to the fuel price increase, because we cannot let our clients pay more. We are running at a loss,” said Maluka.
Muntu Gama of the South African National Taxi Association (Santaco) Mpumalanga said they experience the same problem.
“We are facing a very bad situation for the taxi industry, and we are talking to various role players to discuss ways and means to absorb the fuel price increase,” he said. “It costs R1 200 to fill up a Quantum’s tank. This means we are making no profit, as we are scared of losing customers if we increase the price.”
According to Gama, Santaco will soon issue a media statement giving information about their plans to deal with the increase. The road transport industry said it can still absorb the increase due to contractual arrangements.
“Every transport contract makes provision for changes in the fuel price,” said Hennie Goosen of VR Cargo. “It is with the traders where the problems start, as they find it too expensive to transport their goods, especially on the longer routes to Durban and Richards Bay. You will find fewer trucks on the longer routes, as we don’t get as much work in anymore due to the price of fuel,” he said.
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