Gas guzzlers are here to stay

SOUTH Africans are staring down the barrel of another massive fuel price increase next month. But, there’s a long way to go before motorists opt for environmentally-friendly electric vehicles.

Petrol is expected to rise by 87c per litre, next month, meaning that, one could pay as much as R18.26 per litre of 95 Octane in Gauteng and inland provinces and R17.54 in coastal areas in the Western Cape and KwaZulu Natal.

Unleaded Octane 93 may spike to R17.55 a litre on the coast and R18.07 inland. Diesel is expected to rise by 58c. It is forecast to cost R15.66 in Gauteng and inland areas, while on the coast one may pay R15.05 a litre.

With petrol edging towards R20 a litre, the AA’s Layton Beard, said there are many complicating factors preventing the swift transition from fuel to electric vehicles, though the cost of fuel was not a factor.

“When people look at fuel prices, they are not looking at whether it’s going up or down as a reason to change to electric vehicles or not, and part of the reason for that, is that you can get a cheaper more fuel-efficient new (fuel propelled) vehicle than a second hand electric vehicle,” said Beard.

In a week in which Volkswagen South Africa announced that the iconic Golf 8 GTI arrives in the country on September 1, at a cost of R669 300, he said, the disparity in pricing between electric vehicles and the high cost of electric vehicle ownership probably remains one of the current barriers.

Earlier this month the AA, which uses data from the Central Energy Fund (CEF) to compile its forecasts, said the mid-month data indicates that petrol is set to increase by 87 cents/ litre, diesel 58 cents and illuminating paraffin 56 cents. This was attributed to the weakening Rand, as a result of the riots which are expected to play a key role as the exchange rate impacts local fuel price.

Norman Lamprecht, executive for Trade, Exports and Research at Naamsa The Automotive Business Council, said studies show that the running costs of an electric vehicle is lower than that of an internal combustion engine (ICE) vehicle.

Gaylor Montmasson-Clair, senior economist: Sustainable Growth at the Trade & Industrial Policy Strategies (Tips), said many believe that South Africa was behind Norway the global leader in electric vehicle consumption.

A window of opportunity, according to Montmasson-Clair, is the fact that on the manufacturing side, roughly half of the vehicles produced in South Africa are exported to the UK and the US markets which are rapidly shifting to electric vehicles.

George Mienie, AutoTrader chief executive, said their 2021 Mid-Year Car Industry Report suggests that 22.5% of consumers found electric vehicles easier to drive with better performance.

“We asked respondents what were the disadvantages of an electric vehicle - initial cost of purchase currently ranks in 4th place (Charging time is 1st). However, the positive news is that this concern has reduced from 55.3% (2020) to 47.9% (2021). That said, this continues to remain a major barrier to adoption,” he said.

The rising fuel price is unlikely to have any impact on the sale of electric vehicles.