With expected fuel price hike coming, taxi sector not increasing prices for now

The Automobile Association (AA) has predicted a 99 cents a litre increase in petrol prices while diesel will go up by a massive R1.42 a litre in November.

Commuters wait to enter their taxi at Bree taxi rank in Johannesburg. Picture: AFP

JOHANNESBURG - With another steep increase in fuel prices expected, many businesses including the taxi industry, are considering how they are going to cope.

Santaco in Gauteng said that different taxi associations would be hit hard by the increases.

The Automobile Association (AA) has predicted a 99 cents a litre increase in petrol prices while diesel will go up by a massive R1.42 a litre.

The minibus taxi industry, which transports more than 16 million people a day, said that for now, they did not plan on increasing fares.

“We are currently battling you know. As far as we are concerned, industry is going through a lot, because you know when petrol goes up people expect us to increase our fares. And further petrol hikes are going to affect the taxi operators, they are going to hit hard on the taxi operators’ pockets. It's not good for the industry at all.”

But taxi associations have raised concerns about the upcoming price hikes.

Gauteng Santaco secretary-general, Ralph Jones, said: “We are not being subsidised as the taxi industry. So that's why we are forced, you know, to say if need be, we'll have to increase if not based on the increment of the petrol but economically, then it's affecting our pockets.”

Millions of South Africans rely on this mode of transport, but the latest fuel price hike may cause a domino effect with other price hikes and affecting inflation.

Meanwhile, consumers are being warned that they will feel the impact of the anticipated fuel price hike.

There are knock-on effects to high fuel prices - with consumers likely to see their living costs go up as well.

CitiBank economist, Gina Schoeman, said that the impact may not be immediate but it was coming.

"Yes, there is always an impact from any cost such as fuel prices on the eventual end goods such as food but with South Africa's situation right now, we're seeing that a lot of this has been held back because the consumer is still relatively weak and wouldn't necessarily be able to handle a sharp increase in inflation."

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