Cape Town – Retailers of liquid petroleum gas (LPG) are upset with the new price clamps on gas, and many are threatening to stop selling LPG altogether.
After Friday's surprise announcement by the department of energy that household gas prices would be regulated and a cap put on the profit margin of R1.20/kg, as from Wednesday, retailers claim it will not be worth their while to sell the gas.
Retailers at the coast can charge no more than R15.69/kg for LPG, and in Gauteng no more than R17.27/kg.
Peter Noke, national director of the South African Petroleum Retailers Association, said the regulated prices, along with the many risks involved in selling LPG, would make LPG more affordable, but not more accessible.
The retail industry was disappointed that it was told only on Friday that prices were to be regulated from this week, he said. Many retailers read the news in Sake24 only on Monday.
The department of energy is meanwhile calling on the public to help ensure that dealers charge the correct price for LPG from Wednesday, said Tseliso Maqubela, deputy director-general for hydrocarbons and energy planning.
LPG distributor African Oxygen [JSE:AFR] in turn warned that it would be a major challenge to force price regulation on criminals illegally filling and trading in gas cylinders produced by legitimate gas distributors.
Maqubela agreed that it would at first be difficult to enforce the price regulation, as this would require some 4 500 inspectors.
Afrox managing director Tjaart Kruger confirmed that Afrox had been in discussions with government about price regulation from the outset.
Close co-operation was needed between government, the LPG industry and consumers for effective regulation and the eradication of illegal practices.
These practices were costing large distributors in the 9kg gas cylinder market an estimated R150m a year, Kruger pointed out.
- Sake24.com