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Price cuts hurt petrol stations

Jan 07 2009 11:08 Francois Williams

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Cape Town - Owners of petrol stations in some instances suffered losses of between R50 000 and R60 000 as a result of last month's price cuts, reports Peter Noke, director of the SA Petroleum Retailers' Association.

He explained that petrol station owners caught with large stocks on hand have had no choice but to sell at a loss.

Certain petrol stations take the risk of running out of fuel because they postpone orders to limit losses.

When fuel prices rise sharply, retailers are also negatively affected because higher prices lead to lower sales and consequently reduced profits.

Some dealers have experienced serious cash-flow pressure since last year and may be obliged to sell their petrol stations.

According to Noke, not one of the 1 000 petrol station owners who are members of his association has shut down. Oil companies generally get a new owner for the relevant premises in time.

- For more business news in Afrikaans, go to Sake24.com.

 
 
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