High fuel prices have presented a myriad of problems for filling station owners. The fuel retailers have experienced a surge in fuel theft and fraud cases as well as a decline in sales volumes.
Chief Executive Officer of the Fuel Retailers Association, Reggie Sibiya says the high cost of fuel has also pushed others out of business. Times will get even tougher for consumers going forward.
Gauteng motorists could find themselves having to pay at least R17 for a litre of petrol next month.
There is a high possibility that motorists will pay at least R1.01 cent more for a litre of petrol, while a litre of diesel will cost about R1.24 more and R1.04 cents more for paraffin.
Fuel retailers say they are selling less fuel, making their businesses less profitable.
They have also recorded an increase in petrol theft cases. They have also seen a surge in card fraud where fraudulent cards are used to fill up and this ends up costing the business owners.
“We are seeing a lot of what we call fuel drive offs, where customers come especially at night, fill up and then drive off,” says Sibiya.
The high fuel price will have ripple effects stemming from increased transportation costs. This will push up inflation which may lead to the Reserve Bank hiking interest rates.
“It’s going to hit the overall consumer price index by 0.5%,” says South African Institute of Race Relations Chief Economist Ian Cruickshanks.
Cruickshanks says the economy is fast heading towards stagflation, a stagnant economy with high inflation. With the United States expected to hike rates, this will lead to further capital outflows from emerging markets like South Africa. This could motivate the Reserve Bank to hike rates for the country to remain competitive, but high rates could also further discourage economic activity. Click below for more on the story:
