The department said that the price increases are coming due to higher prices for international petroleum products as well as a weaker rand. The biggest pain, however, comes for owners of diesel vehicles.
Prices for petrol will jump by 51 cents per litre, while diesel prices will shoot up by around R1.40 a litre.
The diesel price hike comes amid rising global demand for the fuel. Analysts have pointed to further pricing strain down the line. This is significant because diesel is used in most trucks that freight goods across the country.
Higher diesel prices put transporters under immense pressure – with hikes likely to feed along the entire supply chain and ultimately impact end-users or consumers.
PETROL AND DIESEL PRICES IMPACT
But consumers themselves will be feeling the crunch. Even with smaller 45 litre tanks, drivers will have to pay around R23 more when filling up to capacity from empty. Diesel drivers will have to fork over R64 more.
On larger vehicles with bigger-capacity tanks (80 litres), the damage is bigger. R40 more for petrol, and over R115 more for diesel.
According to Bloomberg, a diesel shortage is rapidly spreading across the United States. Sending alarm bells ringing for other markets.
This exacerbates the soaring prices in Europe and the US. Spurring a fresh bout of inflationary pressure ahead of a winter that is expected to see major supply disruption.
WHAT STAKEHOLDERS SAY
The Truck Association of South Africa, AgriSA, and the Road Freight Association have all warned that rising global demand and rising local prices will deeply impact the South African supply chain and consumers.
For truckers, rising prices deepen the general cost of living crisis in the country. This will force many to shut their doors. This extends to other transporters as well, with public transport also heavily impacted by the increases.
For farmers, as input costs rise, the entire food supply chain is impacted. It ultimately leads to higher prices for consumers.
“Diesel is the fuel source used by most transport companies in South Africa. It is the energy source that drives our logistics chain,” said the Road Freight Association’s Gavin Kelly.
“Every time it increases, it increases the cost of moving the goods through South Africa. We are very aware that the diesel price is determined by external factors. However, the reality is every time the price increases, transporters have to pass that cost on. They cannot absorb it.”