The Truckers Association of South Africa has explained what the latest diesel price hike would mean for transport costs and the ripple effect on the supply chain, as the diesel price in South Africa will increase by R1.43 per litre on Wednesday.
An impending oil crisis also threatens to add to South Africa’s power supply woes.
Speaking to CapeTalk Radio station, association president Mary Phadi highlighted that there is severe pressure on both clients and the transporters, with an increasing number of businesses closing down.
“(In) the past two months when petrol prices were going down, diesel prices didn’t go down and there are quite a lot of challenges, and this is affecting the clients as well as the end user. It is going to be difficult for people to use trucks and transport food on roads and it is going to affect business itself because we still have to (go) back and negotiate every time when there is a diesel hike,” she said.
Phadi said that the country is heading for a situation where there will be a shortage of trucks on the road.
Independent consultant in energy research, and fellow in the Global Risk Government programme at the University of Cape Town, Hilton Trollip, said: “South Africa use to have large oil reserves. We sold them. And we used to have working oil refineries but most of them are closed and that means we have to import most of the diesel that we use or get it from Sasol.
“Sasol’s production prices stay the same but they charge international market prices,” Trollip said.
He said that when the international diesel price go up so does the cost of supplying the country with electricity, with Eskom using it as part of its emergency generation reserves.
Trollip also highlighted how the impending global oil shortage will harshly affect Eskom’s ability to use diesel to try to keep the lights on.
“(Often) when there is an international oil crisis where you actually can’t get products, (as) has happened in the past, the first symptom is the massive price buck, which will also put massive price (pressures) on our electricity or make load shedding worse if we chose not use diesel to lessen the load shedding.”
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