R2 petrol price hike
PAIN AT THE PUMPS: Dire fuel price forecast. File picture: Motshwari Mofokeng/African News Agency (ANA)
South African motorists are in for a groot skrik at the petrol pumps next week.
According to the latest daily snapshot from the Central Energy Fund, 95 Unleaded petrol was looking set to increase by close to R2 per litre, while diesel was to go up by close to R3.
It was unfortunate that global supply and demand issues, driven also by some geopolitical pressures and the weakening rand, brought such a huge increase at a time when both motorists and fuel retailers were battling hard to survive, says Fuel Retailers Association (FRA) CEO Reggie Sibiya.
Sibiya said the hardships experienced by motorists translated to low fuel consumption which further affected retailers’ profitability which they said was already very compromised by under-recovering margins, increased credit card costs linked to rising pump prices, increased bank charges to service increasing overdraft facilities and affecting cash flows.
“Whilst we have enjoyed some brief relief the turnaround, has been too drastic and a shock to the system,” Sibiya said.
The FRA added that it was very unfortunate that this petrol price hike coincided with the annual adjustment to petrol attendants’ wages which was critical to ensure employees' needs were also taken care of, according to Business Report.
“This wage component is an in and out and does not contribute at all to the retailers’ profits.”
However, wage component increase is only 5cpl and insignificant when compared to a price increase over R2 a litre for example on diesel, Sibiya added.