The fuel-price increase announced by the Department of Energy came into effect this Wednesday, with Automobile Association (AA) spokesperson Layton Beard commenting that the hike is due to the rand's weakening against the US dollar.
"These increases are quite steep and come on the back of increases earlier in the year," Beard said. This year alone, motorists have suffered five increases already. Beard continued to say that the AA was concerned about the impact of the increases on consumers.
Prices in effect as announced by the Department of Energy from 4 July are:
Petrol 93 (ULP & LRP) 26 cents per litre increase;
Petrol 95 (ULP & LRP) 23 cents per litre increase;
Diesel 0.05% Sulphur 26 cents per litre increase;
Diesel 0.005% Sulphur 24 cents per litre increase;
Illuminating Paraffin (Wholesale) 22 cents per litre increase.
They cited global problems, such as the weakening of the rand against the US dollar and fluctuating prices of crude oil, as some reasons for the price hikes. "We do foresee further fuel price hikes, driven by South Africa's weak economic position and potential fallout from trade tariff disagreements between the USA and other nations," warned the AA of South Africa. They stated that "combined with lower wage hikes and the increasing cost of living, the expenses of commuting by private car might spiral beyond many motorists' reach. Commuters who would never previously have considered public transport or carpooling may soon have no option."
In related news, in an article written by Mzilikazi wa Africa in The Sunday Times on 1 July, he stated that the Road Accident Fund (RAF), which is technically insolvent with contingent liabilities of close to R190-billion, pockets R1.93 for every litre of petrol sold. "Regardless of its bankrupt state, the RAF is renting office chairs at R1 666 per chair per month," wrote Wa Africa. They have a contract to rent 300 chairs per month.