Johannesburg - The recent drops in the petrol price has been met with some fanfare as consumers look for relief wherever they can find it.
Motorists, in general, are pleased to receive some respite after having faced fuel hike after fuel hike over the past year.
Naturally, consumers would expect that the prices of goods and services would drop due to cheaper fuel but that is not necessarily the case, well at least not immediately.
While the retail price of 95-grade petrol would decrease by R2.04, the wholesale price of diesel fell by 56 cents, and herein lies the problem.
Commuters should not expect the decrease in petrol, the third in three months, to automatically result in cheaper taxi fares and there are a number of reasons for this.
It is important to note that the taxi industry had absorbed the impact of multiple fuel increases for quite some time before being left with little choice but to increase taxi fares by between 25% - 30 % in July this year.
National Taxi Association spokesperson Theo Malele indicated that the fare increases coupled with the decrease in fuel prices have had little effect on the bottom lines of taxi operators and profits remain low.
Malele highlighted that taxi fares cannot be adjusted when fuel prices change. He indicated that the prices fluctuate so often that it would be impractical to adjust prices every other month.
“You need to be cognisant that although fuel has decreased it has not had a knock-on effect on our other costs, like the price of spares has not changed. The general maintenance of our vehicles still remains high.”
“We are a community-based service charging minimal fares and we receive little support from the government,” he said.
Kagiso Mohoaduba uses taxis to commute to and from work and understands what the taxi industry is faced with.
He said, “there is nothing we can do, they have to also make living. Yes we want the prices to go down but at the end of the day we have no choice we need to go to work and the prices are what they are”.
In a statement, the Road Freight Association indicated that a decrease in the cost of fuel – in particular larger decreases – will have a tremendously positive effect on transport costs and supply chains, which will provide relief to consumers in the long run.
The statement in part read: “While the price of fuel has dropped, the effects in the logistics chain should be felt in the coming quarter and will certainly make life slightly easier for consumers towards the end of the year.”
IOL Business