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Fuel the burn

As the sixth price rise of the year sent fuel heading towards R10 a litre this week — amid predictions it could reach R11 by year-end — there are few signs that South African motorists are making serious adjustments to the end of cheap fuel.

In the United States petrol consumption has dropped 4,7% year-on-year as motorists have switched to fuel-efficient vehicles, changed their driving habits and moved to public transport, bicycles and car pools.

According to the South African Petroleum Industry Association, petrol consumption in South Africa actually rose 1,15% between April last year and April this year, from 11,4-billion litres to 11,5-billion litres.

Consumption has dropped 0,9% in the past quarter, indicating some dawning of awareness. But diesel consumption rose sharply, by 9,5%.

This may reflect a shift to diesel-powered cars. Another factor, it has been suggested, is the surging government use of diesel, particularly by hauliers building up coal stocks at Eskom power stations.

Tony Twine, analyst and director of Econometrix, says it will take more than the 39% increase in petrol over the past year to make South Africans shift to cars that guzzle less gas.

The only significant increase in the sale of fuel-efficient vehicles occurred in 1979 when the petrol price increased by 80% in six months, he said.

According to Twine, the current price increase will affect the market size, but not the market mix. Instead of buying fuel-efficient vehicles, people will hang on to their old cars.

He explained that people tend to think short-term when reducing expenditure. ”It will take months of fuel saving to make up for the price of the fuel-efficient car and most people are not that patient.”

His prediction is backed by news from the National Association of Automobile Manufacturers of South Africa that vehicle sales have fallen by 28% in the past year.

From January to April this year the sales of small cars decreased by 20% (from 9 977 in January to 7 967 in April).

Econometrix records that for the first time in several years, the sale of premium cars — with a value roughly in excess of R300 000 — exceeded the sale of entry-level cars valued at less than R130 000. The main reason is that lower- to middle-income groups are mainly feeling the pinch

Rising fuel prices were a factor, said Nico Vermeulen, Naamsa director, but so were inflation and interest rates.

AA spokesperson Gary Ronald pointed out that South Africa’s poorly developed public transport system helped sustain the country’s car culture. But South Africans were increasingly resorting to lift clubs.

The love affair between South Africans and large cars was highlighted in interviews with motorists in Johannesburg this week.

”In my car I have space and I am a commander on the road,” said financial manager Ngoni Gwatidzo, sitting comfortably on the grey leather of his 3,5 litre Mitsubishi Pajiro. He now pays R1 000 to fill up his 90-litre tank.

Gwatidzo says selling his car and moving to more economical vehicle is not an option. ”The petrol price is very expensive, but I am not thinking of selling my car. It fits my family and I don’t want to drive around in an Uno.”

The price of petrol has increased six times this year, pushing a litre of unleaded from R7,47 to R9,96 between January 2 and June 3.

The AA predicts that the price will continue to increase until it reaches close to R11 or R11,50 a litre by year-end, while diesel could hit R13,50 a litre.

United States investment bank Goldman Sachs has predicted that the price of crude oil could reach between $150 and $200 a barrel in the coming months, which would translate into R12 a litre for diesel in Gauteng.

Avhapfani Tshifularo, pricing adviser for the South African Petroleum Industry Association, was more optimistic, predicting that the price of petrol will stabilise at between R9,50 and R10 a litre by December.

”In the next three to four months the price will keep on increasing, but during the last three months towards December the price of petrol will start decreasing. I believe that there is going to be a further decrease in petrol and diesel sales in the next three months,” Tshifularo said.

Twine agreed that fuel prices will come down at the end of the year. ”Speculators on the international markets drive the oil prices up, but sooner or later they are going to run out of confidence.”

General Motors could ditch Hummer

The surging petrol price has failed to put a dent in the sale of Hummers in South Africa in the past two months, even though sales of the fuel-guzzling vehicles are plummeting in its home country.

General Motors, which makes the military-derived vehicle, announced this week that it might be selling its Hummer business after a 27% year-on-year drop in sales in the United States. Shareholders were told that GM was undertaking a strategic review of the Hummer brand, which includes everything from revamping the product’s line to selling the brand.

This decision was part of the car manufacturer’s plan to expand its range of smaller and more fuel-efficient cars to compete more successfully in a market that is increasingly rejecting large vehicles. A Hummer weighs 2,8 tons and consumes about 15 litres of fuel per 100km.

South Africa is the only place outside the US to manufacture Hummers. The Mail & Guardian has previously reported that for every $100-million that General Motors invests in South Africa the company receives $270-million in benefits from the Motor Industry Development Programme, which is administrated by the Department of Trade and Industry.

Denise van Huyssteen, communications manager for General Motors South Africa, said that 1 191 Hummers had been sold since the vehicle was launched in this country a year ago.

Van Huyssteen said: ”Hummer has been a great success in South Africa. We sold 41 hummers last month. When we launched Hummer in South Africa last year, there was a long waiting list, now we are fulfilling regular demand.

”From a General Motors South Africa’s perspective, we remain committed to growing our business in South Africa. Hummer is just one of our many brands and we will continue to invest in the most profitable portfolios for our business. In addition to this we will continue to work at securing additional export opportunities for our company.”

She said that it was important to note that the announcement by the parent company ”is a strategic review of the Hummer brand and that no decisions have been made yet. We can’t make any decision on Hummer’s future in South Africa because we don’t know the outcome of the review yet. It might be positive.”

Cut the guzzle of your gas

The National Association of Automobile Manufacturers of South Africa and the website ecomodder offer the following tips for getting the maximum mileage out the fuel you buy:

Change to a more fuel-efficient vehicle. Generally speaking, the older the vehicle, the less fuel-efficient — in 1980 the average fuel consumption of passenger cars was more than 10 litres/100km; with the latest fuel-efficient models, it is less than seven litres/100km.

Maintain a steady speed and keep your speed below 100km/h. Above this, fuel consumption increases significantly.

Use the highest gear possible and drive at a low RPM (revs per minute). Shift up between 2 000 and 2 500 RPM.

Decelerate smoothly. Slow down or stop by releasing the accelerator ahead of time to minimise use of your brakes.

Check the tyre pressure frequently. If tyre pressure is 25% too low, rolling resistance increases by 10% and your fuel consumption increases by 2%.

Service your car regularly — poor maintenance can significantly increase fuel consumption.

Avoid stop-start driving, meaning that peak-hour journeys should be avoided where possible.

Minimise use of the air conditioner.

Reduce weight in your car, for example by removing the roof-rack.

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Imke Van Hoorn
Guest Author

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