HESSEQUA NEWS - Rural, agricultural areas like Hessequa, are especially hard hit by the ever-increasing price of fuel.

Transportation takes place mostly by road and apart from getting produce to the market, farmers have to fork out more and more to keep tractors and other farm vehicles and machinery running. 

The Hessequa municipal area is the second smallest local economy within the Eden District, and when farmers feel the pinch, this has a spill over effect on the lives of all those who work and live in the area.

Most consumer products are trucked in from other parts of the country, causing prices to rocket. Wholesale, retail, catering and accommodation make up 27% of the local economy and all of these sectors stand to suffer as fuel prices just go up and up.

When Energy Minister Jeff Radebe briefed the Portfolio Committee on energy in Cape Town on Tuesday 21 August, he said that the department is intensifying efforts to cap and bring down the escalating cost of fuel.

Radebe said it should be recognised that fuel prices are cyclical in a sector that contributes 8.1% to the country's Gross Domestic Product (GDP) and one that accounts for 100 000 direct and indirect jobs. "In the short-term, we have had to intensify our fuel-saving measures.

"We have had to intensify engagements with oil-producing countries, with a view of indicating to them the impact of high crude oil prices on developing economies, but also seek to obtain pricing regimes that would be favourable to our economies," he said.

Briefing members of Parliament on Tuesday, Radebe said in January 2016, before the OPEC decision, crude oil prices stood at below US$30 per barrel. After OPEC took a decision to remove 2% of the global oil production to support higher oil prices, prices have more than doubled in two years and this year, crude oil prices urrently stand at US$80 per barrel.

"There are technical teams from the department and National Treasury that have started to work on the review of the fuel price structure, as indicated by the President about two months ago to see whether there can be any adjustments that can be made.

"We have to finalise the framework for the exploration of oil and gas so that we can have better control of fuel prices through domestic production of fuel and gas," he said. 

Article: SAnews.gov.za

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