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The Road Freight Association said the massive fuel price hikes which come into effect on Wednesday, will lead to a rise in transport costs, more business closures, and more unemployment.
Association CEO, Gavin Kelley, was reacting to the fuel price adjustments for September which will see the price of diesel rocket by R2.76 and R2.84 for the two grades.
The price of all grades of petrol will go up by R1.71c a litre, while illuminating paraffin used primarily by the poor, will increase by R2.78 cents.
Kelley said that transporters will have to increase their pricing to cover the fuel price hikes, particularly for the majority who use diesel.
“Whilst this sounds like an "easy" or simple process, there will be transporters who will not be able to increase costs (either they are contractually bound or they just price themselves out of the market), and thus might not be able to carry on running the business,” he said.
Kelley said one of the biggest challenges faced by transporters is the need to fund operations (the use of fuel) whilst only being paid months after the work has been done - in some cases up to three months afterward.
He said transporters would feel this impact on their businesses, adding that many would not be able to muster the guarantees required for purchasing fuel on credit.
"There is no alternative for transporters, and those that cannot afford to carry loads at the rates or prices customers are prepared to pay, will simply close down," he said.
