AA against proposed fuel tariff hike

The Automobile Association (AA) expressed concern on Wednesday over a proposed tariff increase that would see Gauteng motorists paying 39 cents a litre more over the next two years.

Transnet is applying for an increase of 82,5% on the tariff for petroleum products on the existing pipeline from Durban to Gauteng.

Transnet said in a statement the 82,5% increase would translate into an increase of about 10 cents a litre for the use of the trunk line between Durban and Gauteng.

The increase would have to be approved by the National Energy Regulator of South Africa (Nersa), which was expected to make a decision by the end of March.

Gary Ronald, spokesperson for the AA, said the association did not approve of the proposed increase.

“The tariff increase on petroleum products being transported on the existing Durban to Gauteng pipeline is quite obviously an attempt to subsidise the building of the new pipeline from the coast to
Johannesburg,” he said.

“While the motorist is already contributing in part to the transport of petroleum products to inland suppliers, the AA feels most strongly that any additional increase in the cost of motoring and
freight transport should be very carefully applied,” said Ronald.

Ronald added that the impact on the economy due to increased fuel costs must not be seen just in cents per litre borne by the individual, but rather by the consequential increase on all consumer goods affected by such an increase.

“It is our understanding that the proposed tariffs, if approved by Nersa, would see an additional average increase of 39 cents per litre on fuel over the next two years for Gauteng motorists.
This, in effect, will result in major disparity in fuel costs between inland consumers and their counterparts on the coast.”

Ronald said the proposed increase would result in creating disparity in the fuel industry with a clear bias towards inland refiners and create a situation of unfair profitability within the industry.

Should the proposed tariff be implemented at today’s fuel prices, the cost of a litre of petrol would be R7,46 and the wholesale price of diesel, R6,50.

The AA expected further increases in the price of petrol and diesel from April 1.—Sapa

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