A photo of a car inside a service station

May 21, 2019

Ups and downs of the fuel industry

Fuel has increased by more than R2.60 since the beginning of the year

Petrol price hikes do not translate to profit for fuel retailers, they say the increases are a setback to their business with operational implications.

But Petro Connect, a supporter of the fuel industry, says despite the challenges the fuel retail industry is a crucial player in any economy.

The chief complainants when there’s fuel price increase are usually the consumers. But fuel retailers say there are operational costs implications every time there’s an announcement of an increase.

Fuel has increased by more than R2.60 since the beginning of the year.

Despite all this despondency, Petro Connect encourages entrepreneurs to enter the industry saying it is sustainable. But they still warn that it is a business that is not without its set of challenges.

Mark Harper of Petro Connect says, “With the decision to cap fuel increases still under debate, a further increase is on the horizon in June with the introduction of the Carbon Emission tax.”

The Fuel Retailers Association is against government’s proposal to cap the price of 93 octane petrol.

It claims a cap will cut into already thin profit margins and also accelerate job losses in the sector.

Meanwhile, analysts warn that consumers could be plunged into more debt as the cost of living coupled with the unemployment rate continue to climb.