People living in townships and rural areas are harder hit by fuel price increases as they often have to travel further to get to work, so their transport costs are significantly higher. Picture: Motshwari Mofokeng/ Independent Newspapers
The sustained increases in the price of fuel has continued to hit where it hurts the most, as motorists in townships and rural areas on average buy a mere R100-R200 to put in their vehicles due to financial strain, according to the Fuel Retailers Association (FRA).
Reggie Sibiya, the CEO of the FRA, said in an interview that the country’s average motorist purchase of fuel at the petrol stations depended on how affluent the consumers were in a particular area.
In township and rural areas the operational expenses in these areas were also higher than urban sites.
“A township site pumping 300 000 litres a month will require more labour for example to service these high volume lower transactions than a site in the affluent area pumping 300 000 litres. Other costs like tyre pressure gauges maintenance and windows cleaning materials are higher in township and rural sites as the costs are not not in sync with revenue per transaction,” Sibiya said.
The FRA said South Africa’s average fill varied by area depending on the affluence of the consumer in a particular area.
The local fuel price increased in February and March by a combined amount of just under R2.
This as the AA said that according to data from the Central Energy Fund (CEF), motorists can expect a slight increase to the fuel price in April while diesel users can expect a decrease as reported by the Cape Times.
The AA said that while the year did not get off well for all grades of fuel, any form of relief for consumers was welcome, especially going into the Easter holidays.
Layton Beard from the AA said that according to the latest data from the CEF, ULP95 is expected to climb by around 10c/litre, and ULP93 by around 9c/l. “The wholesale price of diesel is expected to decrease by between 34c/l and 38c/l while the cost of illuminating paraffin is slated to come down by around 47c/l.
James Williams, the head of marketing at Wonga, a financial services provider that offers short-term loans in South Africa, said that when considering the current consumer spending trends in South Africa, the FRA’s assertion made sense.
He said households were under a lot of pressure financially, and even more so now with the recent fuel price increases.
Wonga said this purchasing behaviour might be due to a number of factors like people watching their spend closely, budgeting more carefully, and spending only on what they needed in order to make ends meet.
“This may mean that they are travelling only when absolutely necessary, so they did not need to fill up their tank.”
Williams said many people received a weekly wage, which they spent on necessities such as transport to get to work, electricity and food to feed their families.
“Within the informal economy in South Africa, many consumers are often locked out of using online services and alternative payment methods. This results in payments towards fuel or grocery items being made in cash. It may be that these transactions are made in smaller amounts, as people want to avoid the dangers of carrying large amounts of cash.”
For consumers, the surge in the fuel price has dramatically increased the pressure on already strained household budgets.
“People living in townships and rural areas are harder hit by the increases as they often have to travel further to get to work, so their transport costs are significantly higher. This leaves them with less money to spend on essentials such as groceries and other day-to-day living expenses,” he said.
Wonga said the latest petrol price hike has had a significant impact on consumers’ pockets, as the current cost of living made it challenging for many people to live within their means. The lender said the reality was that people needed to commute to work and transport their children to school, and it was becoming increasingly unaffordable for many households to do so. For those earning less than R7 500 per month, research has shown that up to 20% of their income is spent on transport, it said.
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