Govt notes diesel stockpiling as steep fuel price hike looms - DMRE
The Fuels Industry Association of South Africa says it has noted an increased demand for diesel, at the wholesale level, as consumers brace for a fuel hike in April.
The price of petrol alone is expected to increase by at least R5 per litre next month, as global oil markets have surged in recent weeks, due to the war in the Middle East.
The fuel price announcement is expected to be made this Friday.
The Association held a virtual media roundtable on Wednesday to discuss the fuel pricing mechanism and the broader implications of current global geopolitical developments on South Africa’s fuel supply.
"From the daily meetings we are holding with industry stakeholders, some wholesalers have indicated that certain clients are placing additional orders beyond their usual monthly volumes," said Director for Fuel Pricing Mechanism Robert Maake.
"This has created extra demand, particularly for diesel, mainly from farmers who are trying to secure more supply. This behaviour is driven by efforts to mitigate the impact of an anticipated fuel price increase."
Maake allayed fears of a shortage of fuel in the country as the conflict continues.
"In terms of supply, there should be no cause for concern. We receive daily updates on vessels and shipments arriving in South Africa and offloading finished products, which indicates that supply remains stable," he added
South Africa imports the majority of its fuel, and the price is largely determined by international markets and the exchange rate.
Industry maintains local stock and imports from various countries; however, global conflicts may create short-term disruptions.
Higher fuel prices increase transport costs for goods and delivery, which can raise food and other product prices.
Diesel price hikes can also slightly impact electricity costs, as some power generators use diesel as backup fuel.
