Fuel price drop: Do not expect grocery price relief yet!
Fuel price drop will bring no relief to consumers grappling sharp increase of container freight charges that went up by 800% to date.
General picture of fuel and petrol station in Edenvale, 21 January 2021. Picture: Picture: Neil McCartney
While there is general relief with the looming drop in the price of fuel next month, the Motor Industry Staff Association (MISA) has warned that this will not translate to respite from the grocery bill anytime soon.
According to the association’s head of operations Martlé Keyter, the predictions are that it will take at least three months for consumers to feel the relief on their pockets as the Rand continues to stand strong against the US dollar.
According to the latest statistics from the Central Energy Fund, it is expected that the fuel price will drop significantly in September 2022.
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The decreases of 95 unleaded petrol is expected around R2.60 a litre and 93 unleaded could go down by R2.45 a litre.
“This will help motorists, but not consumers who are suffering under the sharp global increase of container freight charges that went up by 800% from pre-Covid-19 to date,” Keyter said.
Economist for the Optimum Financial Services Group, Dr Roelof Botha, said the impact of the Covid-19 pandemic was so severe on teams working at ports globally that it caused mass delays of vessels.
“The longer a vessel is delayed, the more expensive the goods it carries becomes,” he said.
According to Botha, 80% of all tradeable goods were transported via sea.
The duo agreed that government should continue to grant relief to motorists on the general fuel price levy pending a comprehensive review of the fuel pricing methodology.
Botha said government called for public comment on plans to put a fuel price cap on 93-octane petrol last month.
Mineral resources and energy minister, Gwede Mantashe, published a notice in the government gazette under Section 2(1) (c) of the Petroleum Products Act, giving notice of the intention to introduce a price cap or maximum price for 93-octane petrol.
“Capping of the fuel price has never worked anywhere in the world because it is simply too volatile. The only solution will be for government to shelter motorists from the direct impact by adjusting the fuel price quarterly instead of monthly,” said Botha.