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Saturday, July 13, 2024

Freight Companies Urge Government to Lower Fuel Taxes to Arrest Price Hikes

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DURBAN – Key role players in the freight industry are appealing for the government to intervene and lower fuel taxes.

This comes on the back of another fuel increase which will see motorists fork out over R20 per litre from tomorrow.

Express Freight business, Bigfoot Chief Finance Officer Denesh Singh says the fuel hikes are crippling the freight sector and the economy.

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He was speaking at a webinar on South Africa’s fuel hikes where he was joined by Consumer Advocate Ina Wilken and Portfolio Manager and Business Unit Head at Sasfin Mohil Bandulal.

Singh says that since the start of the year, there has been a massive increase in fuel costs which ultimately affects the ordinary consumer who relies on the freight sector to deliver food, medicine and other essential goods for their daily living.

“A higher oil price and a rampant dollar are what determines our fuel prices. If we look at the stats as well in terms of the fuel prices, we look at from January this year, there has been a 31% increase on the price of 93 and 95 unleaded fuel. This is significant. Further to that between January to now, 11 months into the year, we’ve had five fuel hikes. This is negatively impacting on the consumer and business,” Singh says.

Speaking on the behalf of the consumer, Wilken said when the pandemic first hit South Africa, prices were increased by about 25%. She said consumers cannot afford the fuel hikes. She called on the government to address the levies on fuels.

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Bandulal explained that South Africa is a price taker and cannot set the price of fuel. He says there are also other factors surrounding the importing of fuel; transporting costs, insurance, tax and excise.

“Governments have very little flexibility in repricing. However, there is a vast amount of flexibility once it’s on our shores because that’s when the taxes kick in,” he said.

Read also: December Petrol Price Shoots To More Than R20 a Litre

Bandulal said that the government and Central Energy Fund had to work together to look at prices at the pump.

The panel agreed that there needs to be a body set up to address the industry’s concerns with the government at a national level.

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Singh says from a business perspective, this body can drive dialogue with the government and advise policymakers.

The Department of Mineral Resources and Energy says both grades of petrol will go up by 81c per litre from Wednesday, December 1, while 50ppm diesel will increase by 74c and 500ppm by 72c. Illuminating paraffin will rise by 42c – which will cause further financial pain to consumers who have been hit with rising food and utility costs. IOL

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