Fuel price hikes and the rise of taxi fares
An increase in fuel costs in July saw unleaded petrol 93 soar to a record price of R26.31 per litre – a whopping 9.9% increase in just one month. This time last year, the price was R17.20, and in 2020, it was R14.83. With fuel costs almost doubling in just two years, it’s no surprise that minibus taxi fares have also had to increase.
Although the industry has tried to absorb some of the increased transport costs to lighten the load of their commuters it is a crippling business. Russia’s military action in Ukraine is mostly to blame for pushing international crude oil prices up, which is expected to last for the duration of the war. While our national government waived the fuel levy for two months to help keep the prices down, this concession was only a temporary relief measure.
Taxipreneurs and associations have been forced to consider increasing taxi fares, all while the salary scales of commuters remain the same. The lack of subsidies from the government doesn’t help either, as these remain the central domain of rail and bus networks. Most of the income generated from taxi fares goes to the ever-increasing fuel costs, with little left over to pay employees and monthly vehicle repayments. Minibus taxi owners are losing money, which in turn causes tension between owners and drivers.
While commuters are still reeling at the increased costs, the knock-on effects are seen in all areas. Trade and industry feel the negative effect at every point of their supply chains, and increased costs of manufacturing and transporting goods are also passed on to the people who consume them.
Himal Parbhoo, CEO of FNB Retail Cash Investments, in a recent interview, said that the fuel increases have had a strong impact on consumers’ pockets, making it hard for them to manage their finances. His advice was to consider planning day-to-day or weekly travel, join or start a lift club and look at ways to save money each day, like taking a packed lunch to work instead of buying it.