Fuel price hike: tough times ahead

With a steep fuel price hike on the cards against the backdrop of the current economic crunch‚ business rights organisation AfriBusiness has warned of tough times ahead.

The organisation‚ with more than 12‚000 member-businesses‚ said a 67 cents per litre increase in the price of petrol and a 44c/l rise in the price of diesel on Wednesday will be felt across businesses and SA will feel the pinch.

CEO Piet le Roux said the increase‚ the fourth since February‚ naturally affects the cost of transportation and commuting‚ adding that prices of food‚ goods‚ services and agriculture are determined by the cost of fuel.

“Fuel‚ like electricity‚ affects all businesses and adds to cost base. It feeds to the cost structure of the economy‚” he said.

Le Roux said the state of the country’s economy was a real cause for concern‚ adding it was a pity consumers and business had no control of the global economic and the country’s political direction.

He however said if there was one thing that SA could do was to project political stability and certainty as the value of the rand reacted to political developments.

“Though the value of the rand is affected by the movements in the economic sector‚ it also tends to react to political developments and the weakening rand impacts on imports and other economic activities‚” he said.

The National Taxi Alliance has written to transport Minister Joe Maswanganye requesting an urgent meeting to discuss the hefty fuel price hike.

The organisation’s secretary general‚ Alpheus Mlalazi‚ said they could not raise taxi fares in the wake of the fuel cost hike as they were transporting poor people.

He said if they increased fares‚ these would be higher than those charged by trains and buses‚ which are subsidised by the state.

“Raising taxi fares for us does not make business sense. Already the taxi industry is charging charity fares but we are not sponsored by the state. If we increase‚ commuters will simply go to our subsidised competitors‚ who are charging market-related fares‚” Mlalazi said.

He said they wanted Maswanganye to pronounce on their demand for a subsidy or face the industry in the streets or in court.