The CEOs of South Africa’s three major food and grocery stores are dissatisfied that the government has not extended the reimbursement for the diesel fuel charge to food shops.
Pieter Boone of Pick n Pay, Mike Bosman of Spar, and Pieter Engelbrecht of Shoprite Checkers have all spoken on the national budget.
Yesterday (February 22), the finance minister promised diesel-related pricing relief for food businesses during his national budget statement.
“To ease the impact of the electricity crisis on food prices, the refund on the Road Accident Fund levy for diesel used in the manufacturing process, such as for generators, will be extended to manufacturers of foodstuffs. This takes effect from 1 April 2023 for two years,” the minister said.
Food merchants, on the other hand, are outraged by this decision since they are forced to spend billions of rands on fuel each month to power their freight vans and generators.
“It is costing us billions of Rands in diesel to fuel our emergency generators,” they said.
“The government has accepted the logic that the food industry should not be penalised for the energy crisis but has only done half the job. Our supermarkets are on the front line in keeping the lights on, and the shelves and chillers stacked, for customers during load shedding.”
Despite their efforts to absorb as much of the expense of keeping the lights and refrigerators on as possible, the corporations stated that they cannot avoid passing the costs on to the public indefinitely.
The CEOs have requested government cooperation.
“We urgently ask the government to look again and extend the refund to retailers,” they said.
On February 8, retail firm Pick n Pay claimed that load shedding has had a significant impact on their business operations, costing it R60 million per month to fuel diesel generators.
It went on to say that, in addition to load shedding, the firm is being hampered by knock-on impacts such as maintenance costs, generator repair costs, and food waste charges.
According to the company, the present energy crisis is a new permanent reality for the retail sector, and rapid initiatives, such as solar installation and energy consumption reduction, are being planned.
The firm stated that it paid an additional R346 million in the first ten months of 2022 to run diesel generators.
Meanwhile, in an operational update for the six months ending 1 January 2023, Shoprite reported spending R560 million on fuel for its generators – almost R90 million each month.
In December, property developer Attacq revealed that it costs retailers more than R500,000 per day on average to keep operations running during stage 6 load shedding, while pharmacy and healthcare retailer Dis-Chem revealed that, due to load shedding, diesel costs across its stores had increased by 54% to R36 million over the previous six months.
