Durban – The Road Freight Association (RFA) and SA Canegrowers have welcomed Monday's announcement by the Department of Mineral Resources and Energy that the price of diesel will decrease on Wednesday.
Diesel (0.05% sulphur) will decrease by 84 cents per litre while diesel (0.005% sulphur) will decrease by 80 cents per litre.
RFA chief executive officer Gavin Kelly said every time there is a decrease in the price of fuel the cost per kilometre per kilogramme to transport goods also reduces.
He said the decrease depends on the type of operation, this can be between 30%–40% of the daily operational cost, and is one of the largest aspects of the cost of a freight company. This helps as the price of fuel and related lubricant products reduces.
Kelly said the reduction in fuel price is always a good move for transporters.
“This has a positive impact on the revenue streams for operations allowing a better margin, allowing the refurbishment of equipment and the steady building of reserves to deal with larger operational needs,” he said.
Kelly said that it is also true that lower transport costs, through lower fuel input prices, will translate into lower retail transport and storage costs and will benefit the consumer.
“The latest announcement is good news as the pressure on the basket of goods used to calculate inflationary pressures will decrease (which includes the direct fuel cost as well as the resultant knock-on effects at manufacturing and distribution),” he said.
Kelly added that in the long term, if the decrease continues, there will be relief on all commodities in the supply chain and relief for consumers.
“Hopefully, the upward inflation pressure will now begin to ease, making life that much easier for everyone concerned.”
Thomas Funke, CEO of SA Canegrowers, said the association is pleased by the announcement of the decrease in the price of diesel and petrol.
The price of both grades of petrol (93 and 95 ULP and LRP) decreased by 71 cents per litre.
“While load shedding affects 1 135 irrigated growers, virtually none of our members use diesel generators due to the prohibitive cost. The decreases are nevertheless welcome as fuel and cane transport make up 15% of the total cost of cane production. Any reprieve in the diesel and petrol price is therefore welcome and will help to alleviate the financial burden on the country’s canegrowers,” said Funke.