Wednesday, June 25, 2008

Ouch! Petrol price flows past R10 per litre

Don’t feel too bad. Over here in Ausland, the price is hovering around the $1,70 /litre mark which, translated to rands, means we are paying about R13,60 /litre already - and it is expected to hit $2.00/litre soon. Bwaaaa...!!!

Y’know, maybe driving that dorky Prius hybrid thing is not such a bad idea.

And walking, should try more of that.

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In little over a week, motorists will be hit by the seventh fuel price increase this year as petrol goes up by an estimated 70c a litre.

According to a price forecast based on information available last Thursday and the current price regulation guidelines stipulated by the department of minerals and energy, the cost of petrol, currently hovering just below the R10/litre mark, is set to rocket at midnight next Tuesday.

Analysts are expecting an increase of about 68c/litre, although the final figure will be announced by the department of mineral and energy Affairs after 1pm on Friday.

Motorists are now paying between R9,81 and R9,96 a litre. After the hike they could be paying about R10,60/litre.

The hike is estimated, according to Shell's website, at between 70c and 74c/litre for petrol and between 58c and 62c/litre for diesel.

Peter Morgan, CEO of the Fuel Retailers' Association, describes the ongoing price hikes as a "death spiral" that is going to lead to between 10 percent and 15 percent of service stations going out of business before the end of the year.

"If you think about it carefully, your service stations have a 64c/litre mark-up. That's less than 6 percent for a business that has to pay cash to oil companies and is open 24 hours a day, every single day of the year," Morgan said.

"Motorists think service stations make a profit when the price goes up, but it's not the case. The margin is fixed by the government and they can't pass these costs on."

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