. . . as fuel prices go up
MOTORISTS will now pay an extra 85 lisente for a litre of petrol after the Petroleum Fund hiked the price of the commodity to M10.35 a litre on Friday.
Both grades of diesel now cost 70 lisente more while the wholesale price of paraffin has also been increased by 65 lisente.
Diesel50 will now cost M10.30 per litre, diesel500 M10.55 per litre while domestic paraffin now costs M7.25 per litre at wholesale price.
The development comes in the wake of a fuel price hike in South Africa on 4 January 2017. South Africa increased the price of petrol by up to 50 cents per litre, with diesel increased by 39 cents. The wholesale price of illuminating paraffin was increased by up to 58 cents per litre, while Liquefied Petroleum Gas increased by R1.06 per kilogramme.
The South African Department of Energy attributed the fuel price increases to several reasons including higher international prices for oil and the weak performance of the rand against the US dollar.
Another factor that contributed to the increase in the prices of crude oil was the agreement by Organisation of the Petroleum Exporting Countries (OPEC) members to cut production by 1.2 million barrels per day from 1 January 2017 during their 30 November 2016 meeting in Vienna, Austria.
Russia and other non-OPEC producers also agreed to cut production by 600 thousand barrels per day.
With Lesotho’s fuel prices taking the cue of those in the neighbouring country, the Petroleum Fund — a government entity mandated to regulate petroleum fuel prices and standards – was expected to announce a fuel price adjustment.
“The Petroleum Fund wishes to inform the public that the prices of petroleum products will be adjusted with effect from Friday, January 13, 2017,” read a statement from the agency.
“The main reason for the increase is the current rise in the free on board (F.O.B) prices of the products, which has resulted in these products experimenting unit slate under recoveries.”
The Petroleum Fund warned retailers against inflating the prices of the commodities, saying they would face the full wrath of the law.
“The Petroleum Fund wishes to appeal to retailers to charge proper prices because it is illegal to charge prices that are different from the gazetted ones.
“There have been tendencies in the past by some retailors of charging prices that are above those set. This should not happen and any retailer who will be found in contravention of this, shall be prosecuted accordingly.”
In the event members of the public observe retailers who fail to comply with the law, they could phone the toll free number 800022004 to alert the Petroleum Fund.
The fuel price hike compounds the financial challenges consumers were already facing in light of the rising costs of basic amenities such as food and electricity. The El Nino-induced drought of the 2015-16 agricultural season resulted in marked increases in the prices of basic foodstuffs such as maize.
Consumers have also had to grapple with escalating costs of services such as electricity and water, without the concomitant increases in salaries.
Commenting on the fuel price increases, Lesotho Chamber of Commerce and Industry (LCCI) President Ntaote Seboka said they would add gloom to an already dire situation for consumers and businesses trying to keep heads above water.
“Already businesses had been hit hard by the prevailing high commodity prices in the country,” Mr Seboka said.
“As a result, they will be forced to consider hiking prices, which would be a disaster given the high levels of unemployment in the country.”
He said the increases could not have come at a worse time given that consumers were just coming out of the high-spending Christmas and New Year holidays and now preparing their children for the new school term.
Mr Seboka indicated there was little Lesotho could do about changes in fuel prices since they were influenced by international factors. However, he said Lesotho could at least try to create an enabling political and governance environment for the sake of economic development.
“I believe we need to be serious about ensuring there is political stability, rule of law and respect for human rights since these issues indirectly affect our economic and social development as a country,” he said.
“The economic policies developed by the government should also be geared towards creating an enabling environment for economic development which would in turn have a positive impact on the social development.”