On Wednesday midnight 04 October 2023, South African fuel prices increased by more than R1 for petrol and nearly R2 for diesel. This steep increase in fuel prices could possibly affect the cost of products and services in South Africa.
According to the spokesperson of the Department of Mineral Resources and Energy Robert Maake, this new adjustment in fuel prices comes as a result of higher international oil prices, the rand weakening against the U.S Doller and the shortage of diesel on the global market.
Inland Fuel prices increased in this manner:
Petrol 93 ULP and LRP: R1,08
Petrol 95 ULP and LRP: R1,14
Diesel 0.05% sulphur: R1,96.70
Diesel 0.005% sulphur: R1,93.70
Wholesale Illuminating paraffin: R1,51
The Single Maximum National Retail Price (SMNRP) for IP: R2,50
Maximum LPGas Retail Price: R2,50
This price increase in various fuels could spark an increase in goods and services such as taxi fair prices, bus tickets, food prices, clothing, and other products that are transported by road.
Businesses are already battling to make decent profits in the midst of loadshedding, therefore an increase in fuel prices is could mean higher cost of production for businesses, which ultimately leaves business to pass down this increase in production costs to their consumers, by also increasing the price of their goods or services.
By increasing their price on goods and services, businesses risk having decline in customer base or frequent buyers, as people will be prioritising their financial responsibilities, for instance, fast food businesses just to name a few.
From a South African consumer perspective, this increase in fuel prices could mean a decrease in net income, as expenses might become more costly than before.
Also, an increase in the cost of goods and services could force the South African Reserve Bank to hike interest rates, as a measure to counter attack inflation. South African consumers are yet again the ones to swallow this bitter pill as this hike in interest rates, could mean higher car instalments, and higher home loan repayments. Traveling to work and other destinations will also become costlier.
“Fix our exchange rate! This will stop it from crashing and this will help with fuel prices! Government needs to see why its crashing like that it makes no sense at all!”, says @FixSAofficial replying to the Department of Mineral Resources and Energy’s post on X.
The Director of Fuel Pricing at the Department of Mineral Resources and Energy, is yet to have an interview on SAfm. In the interview, he is expected to explain the recent fuel price adjustment.
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Written by: Prince Neo Mokwena
Images: Department of Mineral Resources and Energy, Tshepiso Seleke & Oudtshoorn Courant
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