Business Maverick

PAIN AT THE PUMPS

Petrol price to fall – but diesel, paraffin hikes herald more consumer grief

Petrol price to fall – but diesel, paraffin hikes herald more consumer grief
(Photo: Waldo Swiegers / Bloomberg via Getty Images)

The good news is that the petrol price will drop with effect from midnight on Wednesday. The bad news is that the price for diesel and illuminating paraffin will spike, which will add to escalating transport costs and hit the poor and the working class hard as autumn sets in.

The retail petrol price fell 12 cents per litre from record-high levels, the Department of Mineral Resources and Energy said in a statement on Tuesday. That brings some much-needed relief to South African consumers who have been grappling the past few months with surging food and fuel prices. 

The petrol price in May will still be an eye-watering R21.84 per litre in Gauteng, according to the Automobile Association (AA), and would have been higher without the reduction of the General Fuel Levy by R1.50 a litre. The idea of petrol costing more than R20 a litre is still a shock to most South Africans. 

This bit of relatively good news has been overshadowed by the increase in diesel and paraffin prices. Diesel at the pumps has risen as much as 98 cents per litre, while paraffin’s price has climbed as much as 82 cents per litre.

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“The cost of diesel is now in record territory which will impact the economy as this is a major input cost in the manufacturing, road freight, agricultural and mining sectors and increases to these input costs will be passed on to consumers,” the AA noted in a statement on Tuesday. 

South Africa’s producer price index raced to a 13-year high of 11.9% in March, while consumer inflation is just inside the central bank’s 3% to 6% target range. And reports that the coal mining industry is turning to trucks because of Transnet’s epic failures mean diesel costs will take a bigger bite out of the sector’s bottom line. 

Meanwhile, the soaring price of paraffin – used for cooking and heating in mostly poor and working-class households – will hit the vulnerable bottom of South Africa’s income ladder at a time of mounting job losses, inflationary pressures and the onset of winter. DM/BM

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