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Govt increases fuel sales margin by six cents per litre

Business Section

By FAITH SHONGWE - SWAZI TIMES-25-Sep-2009

MBABANE – Although several fuel service stations owners have had to change ownership because of the challenges faced in the past 12 months, all is not lost as government has approved an increase of six cents per litre in the fuel sales margin.

Chairman of the Swaziland Fuel Retailers Association, Harry Nxumalo said the increase was effective from July, bringing the price to 53 cents per litre sold from the 47 cents they were receiving before the increase. Prior to the 47 cents they were receiving from April this year up until July, fuel retailers received 44 cents per litre sold.

Nxumalo said looking back on the past 12 months, the association concedes that the sector performance was not satisfactory because of the high international crude oil prices that prevailed for the better part of last year. “We convened as an association to discuss our performance, challenges and achievements during our Annual General Meeting (AGM) last week and some of the issues discussed, included the fact we have had to face hardships during the last 12 months.

Some of us have had to borrow more money from financiers because of the high crude oil prices that have prevailed over the past 12 months, however, we have been fortunate that the high international crude oil prices have gone down,” Nxumalo said. He went on to say; “Another challenge faced by fuel retailers was the fuel sales margin, which we believe is hardly enough to meet our expenses.

However, on a more positive note, we were able to lobby government to increase the fuel sales margin from 47 cents per litre to 53 cents per litre in July. Although this was not really what we wanted, it is still appreciated.” He said in other countries, such as South Africa, the fuel sales margin was slightly higher than the local rate, adding that it stood at approximately 64.7 cents per litre.

“It may have gone up from the 64.7 cents per litre in South Africa and all we would like to say to government is that the gap between the rates offered in other countries and locally should not be too big. Government should try and close this gap,” he added. Nxumalo also said some of their members have had to hand over ownership to others, because their businesses suffered losses over the past 12 months.

“Although I would not like to mention how many of our members have had to hand over ownership to others, I can say that there were quite a few. All this happened when the international crude prices were high last year and incidentally, this was during one of the high inflation periods. What happened was that many of us have had to borrow more from financiers, yet at the same time we had to service high cash handling fees with our financiers and handle all other expenses, all at the same time. This became a little too much for some of us and they have had to hand over ownership of their service stations to others,” he said.


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