Fuel price drop welcomed

The Road Freight Association (RFA), the taxi industry and a civil society organisation that tracks food prices welcomed the fuel price cuts announced yesterday, but they warned it would be some time before consumers would see relief across the value chain for food and other services which are impacted by the fuel prices. The Department of Mineral Resources and Energy said that the price of both grades of petrol will be slashed by R2.04 per litre, while the price of diesel 0.05% and 0.005% sulphur will drop by 56.34 cents per litre and 46.34 cents per litre respectively. The wholesale price of illuminating paraffin will go down by 82c per litre. The department said lower prices were due to lower international oil prices and the stronger rand. However, the decreases were less than what had been forecast, especially for diesel. Mervyn Abrahams, the programme co-ordinator for civil society group Pietermaritzburg Economic Justice & Dignity Group (PMBJED), which tracks the price of a basic food basket across different cities on a monthly basis, said that any decrease in the fuel price is welcome. “Fuel is a major input cost for most goods and services. The good news is that in the long term a big drop in the fuel price will bring about a drop in food prices. However, this can take about two or three months to filter into the system.”