Fuel shortages in Nelson Mandela Bay, Eastern Cape are intensifying, with a snap survey showing that a quarter of businesses surveyed are facing rationing.
The snap survey by the Nelson Mandela Bay Business Chamber has shown 25% of respondents are unable to access fuel, with a further 26% reporting that supplies are being rationed.
A total of 53 businesses responded to the survey.
Different businesses would define access to fuel according to their operational needs. For a small business, it may mean being able to fill up at a local garage, while for a hotel, it could refer to having diesel stored on-site.
Nelson Mandela Bay Business Chamber CEO Denise van Huyssteen said the conflict in the Middle East was having a direct effect on global oil markets, which in turn significantly increased fuel prices around the globe, including in SA and in Nelson Mandela Bay.
“The chamber has noted that some local fuel suppliers are implementing fuel surcharges as a direct response to the ongoing conflict, and its resultant volatility on the global oil markets, which in turn is impacting local fuel cost and availability,” Van Huyssteen said.
Further exacerbating the challenge is the pending increase in fuel and road accident fund levies, effective from April 1.
Next week’s fuel price hike could rank among the steepest in SA’s history, with knock-on inflationary pressures expected as rising transport costs ripple through the economy.
Workers and commuters will face rising costs to travel to work and other locations. Tourists may limit or cancel their travel due to rising transportation and other costs
— Denise van Huyssteen, NMB Business Chamber CEO
The businesses surveyed expect increases in operational and input costs, which are likely to reduce profit margins as they absorb the additional costs and may later lead to higher inflation levels.
“The higher fuel pricing comes at a time when our local economy is facing immense pressure, and the metro is grappling with an unacceptably high official unemployment rate of 28.2%,” van Huyssteen said.
“Our automotive manufacturing industry, which serves as the anchor to our economy, faces growing threats of deindustrialisation; the agriculture sector faces increasing uncertainty in terms of export markets; and our tourism value proposition has continued its decline.”
Van Huyssteen said the fuel price had a direct bearing on all sectors of the economy: “As it increases, so too does the cost of transporting goods to export and domestic markets, which in turn results in the prices of consumables, intermediate goods and finished products increasing.
“This will further increase the cost base for local businesses, from small through to large businesses, who may need to reduce expenses, restructure their operations or even close,” she said.
“Alongside this, workers and commuters will face rising costs to travel to work and other locations. Tourists may limit or cancel their travel due to rising transportation and other costs.”
She said a further concern was the reliability and security of fuel supply.
“South Africa is highly reliant on refined petrochemicals such as diesel, petrol and paraffin, and over the past few years it has reduced the number of its fuel refineries, further increasing reliance on imported fuel supplies.
To prevent unnecessary hoarding of supplies, and as an emergency temporary measure, more frequent weekly adjustments to regulated fuel pricing should be introduced
— Van Huyssteen
“Our survey further revealed that 32% of businesses are directly aware of specific fuel and service stations, which are experiencing shortages of petrol and diesel. It is vital that the country has mitigation measures in place to ensure that alternative fuel sources are secured, so that there are no disruptions to supply and that fuel price increases are contained as far as possible."
Van Huyssteen added: “It is critical that urgent measures are implemented to prevent price gouging, panic-buying and stockpiling by opportunistic sellers.”
She said SA’s contingency plans geared toward ensuring fuel security needed to be shared, to provide assurances that the necessary mitigation actions are being taken.
“In the short term there must be transparency around fuel prices, while consideration should be given to providing temporary relief to consumers through the reduction in fuel levies and, at the same time, temporarily increasing the extent to which the fuel levies can be reclaimed via the rebate system.
“To prevent unnecessary hoarding of supplies, and as an emergency temporary measure, more frequent weekly adjustments to regulated fuel pricing should be introduced.”
She said other actions that should be considered include:
- publishing safe fuel storage guidelines;
- sharing real-time, hyperlocal information such as fuel availability, service stations and depot queues through public platforms; and
- managing fuel demand as much as possible, for example by encouraging people to purchase local products rather than imported products.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.