By: Saneliso Mlambo
South Africans will pay less for petrol from Wednesday, but the sharp increase in diesel prices could have a much bigger impact on household budgets. While motorists using 93 and 95 octane petrol will save 52 cents a litre, diesel prices will rise by between R1.23 and R1.38 a litre from 5 August.
The latest fuel price adjustments offer relief to private motorists but pile pressure on industries that rely on diesel. Trucks, buses, taxis, mining equipment and farming machinery all depend heavily on diesel, meaning the increase could eventually filter through to the prices consumers pay for food, goods and transport.
The Department of Mineral Resources and Energy announced the new fuel prices as part of its monthly adjustment. The changes are based on international oil prices, the rand-dollar exchange rate and other factors affecting the cost of importing fuel into South Africa.
For many households, the petrol price cut will reduce the cost of filling up. However, economists have long warned that diesel price increases often have a broader effect because they raise the cost of moving goods across the country.
South Africa’s supply chain depends largely on road freight, with thousands of trucks transporting food, fuel and consumer goods every day. Higher diesel costs increase operating expenses for transport companies, which are often passed on to retailers and, ultimately, consumers.
Farmers are also expected to feel the pressure. Diesel powers tractors, harvesters, irrigation pumps and other agricultural equipment. Rising fuel costs can increase production expenses, placing further strain on food prices already affected by weather conditions and input costs.
The mixed fuel price adjustment means motorists driving petrol-powered vehicles will notice immediate savings at the pump. However, the wider economy may feel the effects of the diesel increase in the coming weeks if businesses begin recovering their higher operating costs through price increases.
The new fuel prices come into effect on Wednesday, 5 August.