File photo: INLSA File photo: INLSA
The Automobile Association (AA) said the fuel price hike today - the highest in more than a decade - would have a “detrimental effect” on motorists, consumers and farmers.
This followed an announcement by the Energy Department that from midnight it increased by 71c, while diesel went up by 60.30c/l, paraffin 73.30c/l and single maximum national retail price (SMNRP) 98c/l .
AA spokesperson Layton Beard said: “The knock-on effect is quite severe. For instance, for a bus service, if it was at R5, they would have to recalculate because the increase will be higher and they will have to go to the consumer.
"The input cost will be expensive. Farmers, for instance, also rely on fuel to transport their food to the market. It is not only the petrol price that will affect the consumers but it will affect retailers, farmers and the economy,” said Beard.
Department spokesperson Lerato Ntsoko said the reasons for the fuel price adjustments were due to the contribution of the rand/dollar exchange rate, the increase in the prices of crude oil, and the annual margins adjustment.
Ntsoko said the rand depreciated against the dollar from R13.62 to R14.10 on average during the period under review.
“The average Brent Crude oil price increased from $56.86 (R764.86) to $62.50 a barrel during the period under review. The crude oil prices hit two-year highs well above $60/bbl (barrel), partly because of the renewed tensions and uncertainties in the Middle East, and partly due to buoyant global demand expectations and the strong likelihood that Opec will extend its output cuts programme well into the coming year.
“In line with the application of the regulatory accounts system the minister of energy has approved a net increase of 3.9c/* in the annual margin adjustments on petrol and a net decrease of 0.7c a litre on secondary storage and secondary distribution margins,” Ntsoko said.
A spokesperson at Freedom Foods, Craig Andrews, said the petrol increase would affect him and the businesses.
“Since we travel all around the province the increase will affect us extremely. It affects our pockets but will make one want to increase mileage.”
lonwabo.marele@inl.co.za