If the price of petrol continues to rise in South Africa, the
country's competitiveness in the global market will take a dip, the
Council for Scientific and Industrial Research (CSIR) said on Monday.
Petroleum is set to increase by 84 cents on Wednesday, bringing the cost
of a litre of unleaded 95 to a record R13,23 inland, according to the
Automobile Association.

A litre of diesel will cost consumers around R12,20. Consumers living
near the coast will pay R12,86 for a litre of unleaded 95 petrol and
around R11,90 a litre for diesel. "South Africa is very vulnerable to
transport costs," said CSIR Scientific Editor Nadia Viljoen."The
majority of our industry is situated [inland] in Gauteng, so we rely on
road transport." That vulnerability, added to the country's lack of
control over the way petrol is priced, makes for a perfect storm, she
said. Viljoen recently released the ninth-annual State of Logistics
survey for 2012. Logistics refers to the movement of goods, from their
source to the consumer.

The costs involved in logistics include the transport and storage of
those goods. "Fuel is the key cost driver of the transport cost
component of logistics," Viljoen said, pegging the amount at 61 percent.
"Logistics costs are good indicators of the cost of doing business,"
she said, adding that the increased cost of logistics "directly affects
our competitiveness globally"."This is passed on directly to the
consumer," she said.

The South African National Consumer Union's advisor on economics and
logistics, Nick Tselentis, said consistent fuel increases are hitting
the average person hard."[The increase] affects our ability to pay for
other things," he said. "Every time the fuel price hits a new record,
that means that inflation is going to be affected." South Africa's fuel
pricing system is designed to "extract value, not give value," he added.

The poorest members of South African society end up paying the most
when petrol prices go up, Viljoen said."Thirty to 40 percent of their
income goes to transport," she said. "There is major inequality."Added
to that is the threat tojobs at the petrol pump, should increases
continue to hit record highs. Fuel Retailers' Association CEO, Reggie
Sibiya, said those employed by the small businesses investing in petrol
stations throughout the country must be protected, despite the strain on
finances. "The increase affects retailers' profitability in a negative
way," he said, explaining that the regulated margin at which those
retailers take their cut is fixed at around 92 cents a litre. "We have
other unregulated costs, like bank charges.

Those costs go up when the fuel price goes up. They're linked to the
petrol pump," he said. "The consumption levels also reduce," he added.
"If somebody's got a R1,000 budget for fuel, that budget doesn't change.
They just buy less fuel." All this puts a strain on the fuel retailers,
making it more difficult to pay the salaries of their staff. "We need
to think about employment," Sibiya said, affirming that laying off staff
to counter rising costs should not be an option. -eNCA