Is there life after R10 a litre?

2008-07-04 00:00

Although local residents and business owners all feel the pain brought about by the latest fuel price hike, their reactions have ranged from despair to grudging acceptance and even defiance.

The increases have hit not only their pockets — they have also begun to change their lifestyles. Some locals have been forced to think about making some painful decisions in the near future.

1."I am confused at the moment. I was talking to my wife … and I don’t know whether to close down the business and maybe open up a shop or something else."

These are the words of a man who has reached breaking point over the rampant fuel price increases over the past six months, Pietermaritzburg-based self-made entrepreneur Siphiwe Malinga, who owns Siphiwe Removals.

Although he will persevere with the hugely successful business he established five years ago, he is clear about the fact that he is fast moving away from breaking even into loss-making territory.

To drive home the point of how astronomical fuel prices have hit locals, consider the following:

Malinga owns nine bakkies and a truck and fuel is by far his major input cost. He supports a family of six and also lends a hand to his extended family. In addition, he employs 18 people, many of whom would find it almost impossible to find a job elsewhere in the local economy.

The tragedy is that the hikes threaten to ruin a true business success.

He finds it virtually impossible to raise his prices every month.

"The diesel price is ridiculous now. Six months ago we were still making good profits."

Lindani Ngcobo is the owner of Lindani Transport and has been in business for 11 years.

He owns three minibuses, four bakkies and employs 15 people.

Although fuel price hikes are also his main source of stress, he complained about the higher costs of servicing and maintaining his vehicles. "It’s not only fuel. Since the beginning of the year, the cost of parts, tyres and servicing have also shot up.

"I might want to go into construction or some other area … but it’s hard to change our lives and businesses."

2. Priya Maharaj is a Durban resident who has commuted daily to Pietermaritzburg for the past five years.

She is a working mother who, together with her husband, supports a family of four.

For her, close family ties, responsibilities and quality of life in the middle-class Durban suburb she lives in makes relocation to Pietermaritzburg very improbable.

Although she drives a relatively efficient Toyota Run-X and forms part of a lift club, the fuel hikes of the past six months have finally caught up with her.

Petrol price increases have sent the cost of filling up the tank from about R280 to about R500.

"The thought of moving to Pietermaritzburg has crossed my mind. Buying property here in PMB adds to the stress. Where would I buy, within my budget, while maintaining the same standard of living and lifestyle?"

Although a lift club has helped minimise her monthly fuel bill, Maharaj said the complications of running a lift club can make life rather difficult.

"There are days when I have meetings and I have to travel alone. My monthly fuel bills — even without the petrol price increases — are [therefore] never stable."

Maharaj said although her family is a particularly lavish one, "tightening the belt" is something new for them.

She said cutting back on luxuries has now become the norm.

3."We’ve been in the transport game for the past 40 years. Diesel runs through our veins."

This was the defiant response from Samen Naidoo, director of Grangold Logistics, a Pietermaritzburg-based transport company at Mkondeni, when asked whether he sees himself pulling out of the transport business due to spiralling fuel costs.

The business has to absorb a whopping R175 000 extra in costs as a result of the latest diesel price hike, due to the fact that their clients only review their ‘increases’ every three months.

Costs have increased by about 70% since the start of the year and Naidoo said their 25 (on average) daily loads on the Durban to Johannesburg run now cost them an astronomical figure in diesel bills — it takes 750 litres to cover a full return trip.

"We are squeezing margins down to the bone. One tyre blow-out can cost us our margin.

Unless you have freehold trucks, breaking even is now almost impossible.

"It’s a hard game, but we have a passion for it."

Grangold employs 50 people, mainly from local communities.

A few months ago, they traded in their old fleet for a new one, in order to minimise downtime spent on breakdowns.

Transport is clearly a risky business and Naidoo said many other factors have placed the business under pressure — diesel theft, hijackings, roadside theft and higher toll fees.

4. Some business owners have had to adopt new measures to hedge against rising fuel costs.

Local retiree Trevor Randall of Zippy Business Services, a professional messenger company, is based in Pietermaritzburg and assists his wife Joy in the business.

Trevor said they had the foresight of introducing their own fuel "levy" about a year ago, after concluding that fuel price rises were likely to dominate their business operations.

"Clients accepted the fuel ‘levy’. If they had refused, I do not know what we would have done."

The process was not a simple one — Zippy conducted a survey of clients to establish a fair levy for each client.

They had to work out mileage and running costs among other factors on a client-by-client basis.

"It was a rather painful exercise. But it has alleviated a huge responsibility within our business. It has also made our income more stable. We also pass on the savings to clients when the fuel price comes down."

Zippy was established 11 years ago and employs seven people.

The Randalls run five medium-size motorcycles and also own two other vehicles used in the business.

He conceded that although their "levy" has helped reduce the impact of the fuel price hikes, profits have diminished as their fuel bill has increased by about R2 000 per month since the start of this year.

5. Spike van Vuuren, owner of the Ocean Safaris, a private boat charter company in Shelly Beach, had to increase his prices to cover rising fuel costs.

Previously, Van Vuuren charged R250 for adults and R200 for children, but since the recent petrol increases he put prices up by R50.

"I can’t keep up with the fuel costs. I had to put my prices up or face running the business at a major loss. Business has been very slow in recent weeks," he said.

He said tourist numbers have dwindled because many people cannot afford to visit the south coast and pay for boat tours.

"Visitors from Gauteng cannot afford to pay for extras. Many have to consider their petrol costs first before any other activities," he said.

Van Vuuren said he is barely covering his costs.

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