Motorists across the country have been urged to stay alert as allegations emerge that some fuel stations are deliberately running dry ahead of a looming price hike expected this week.
Economist Mkhosi Thwala warned that stockpiling fuel to exploit a projected increase of up to E9 per litre could amount to unethical and potentially illegal conduct.
This follows reports that some fuel stations have started rationing sales, with motorists restricted to limited purchases as geopolitical tensions increase and local supply shortage imminent.
The fuel outlets reportedly introduced a cap of E500 per vehicle and those who wanted more were turned away.
This is the result of the ongoing Middle-East conflict that has disrupted global fuel consumption and distribution network.
Thwala called on consumers to report any suspicious no stock or limited supply claims as pressure mounts on retailers accused of profiteering. The developments raise fresh concerns about transparency and accountability in the country’s fuel supply chain.
“Just last week, some of the fuel stations in the country reported they had run out of fuel, but they are actually holding fuel in anticipation of a higher petrol price, or a higher diesel price, for example. Therefore, rationing is certainly possible.
‘‘The question then becomes, is it right for them to do this? In some cases, it is completely legal, and I think in most cases, it is completely illegal. If there is no legal objection, there could be a moral objection to this.
‘‘Government has also called for calm as fuel supply remains stable, but we will see going forward,” Thwala said.
Economist Sanele Sibiya also weighed in on the matter. He noted that the global energy agency, Africa chapter, projected a 3% increase in the average fuel price increase and it was expected that fuel prices would hike.
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At the onset of the war, Sibiya said the average price of Brent crude was E1 099 (US$65) per barrel, now averaging upper E1 522 (US$90) to E1 692 (US$100), a US$35 increase in just four weeks of the war. He added that the increase in the price per barrel must be absorbed and passed into the markets. He said the longer the war persists and with the energy infrastructure damages, the price of Brent crude is expected to increase.
In the short term, he said, the expectation was that the price would start rising rapidly until supply chains and maritime routes stabilise.
He noted that the global economy was experiencing a supply shock, which he said cannot be solved through monetary policy instruments, which focus on the demand side of the economy.
However, he said, caution was required to ensure that the demand side was kept at bay, making sure that the inflation problem was not exacerbated as the country faces both demand side and supply side pressure.
‘‘Eswatini is also on the expected fray of that 3% increase in pump prices.
‘‘The fuel hike pressure has opened an avenue for producers to start manipulating prices. This requires the Competition Commission to make advances in addressing unfair pricing practices. It is important to focus efforts on working with the sector to ensure that we manage the adjustments in prices.
‘‘Inflation in South Africa has also dropped to the 3% level and to 1.9% in the country below the lower band of the target.
‘‘Given inflation targeting and monetary convergence in the common monetary area (CMA), which supported a cut in the interest rate, the impending importation of inflation due to high fuel prices and maritime costs as well as escalating aviation costs globally, threaten domestic inflation,” Sibiya added.
