South Africa’s road transport industry is likely to sustain growth in the short and longer term due to its important role in the South African economy. Road transport is likely to remain the dominant form of transport in favour of rail and air transport due to its relative flexibility and low cost.
While road freight companies have expansion opportunities into Africa that will begin to offer a larger target market, the industry is likely to experience continued pressure due to rising fuel prices, carbon taxes and an ageing road infrastructure.
A total of 80% of the South African population is reliant on public transport. Registered vehicles on the road at 31 December 2012, according to eNaTIS, are: Motorcars 6 110 660 Minibuses 285 859 Buses 51 687 Motorcycles 355 633 Trucks 342 131 Other and unknown 224 050
Despite the existence of formal public transport systems, minibus taxis are the most popular form of public transport due to their informal fares that are lower than buses and trains. According to reports, only 20% of the country’s public transport is catered for by official buses, 15% is made up by trains and the remaining 65% consists of taxis and minibuses. Of that 65%, minibuses account for 90%, whereas metered taxis represent only 10%.
Consequently, informal minibuses are South Africa’s most utilised transport system. It is estimated that there are 150 000 operational minibuses. The government has made numerous attempts to formalise this industry, achieving only minor success with unions such as Santaco, one of the larger taxi bodies.
The road transport industry is heavily dependent on the fuel price. There is a strong correlation between the percentage contribution to gross domestic product (GDP) and marginal increases in the fuel price. South Africa consumed approximately 19,3-billion litres of petrol and 11,1-billion litres of diesel in 2011. This was a 2,2% increase in petrol usage, but a 6,6% decrease in diesel usage over the previous year. In 2008 there was a 4,2% decrease in petrol consumption compared to 2007.
South Africa has very limited oil reserves and about 95% of its crude oil requirements are met by imports from the Middle East and Africa. Gauteng consumes the largest amount of petrol and diesel in the country.
South Africa has a highly developed synthetic fuels industry in which PetroSA and Sasol are the major players. PetroSA manages the country’s commercial assets in the petroleum industry, including the world’s third largest commercial gas-to-liquids plant at Mossel Bay in the Western Cape. According to the South African Petroleum Industry Association, Sasol is responsible for 32,28% of the total production.
The road transport industry is also closely correlated to the general performance of the economy due to its broad customer base, transporting goods used in production for all sectors of the economy.
The government has new plans to upgrade the rail system with a R51-billion passenger rail upgrade and spend R151 billion on freight rail upgrades. The main switch from rail to road and passenger transport has been driven by rail’s relative lack of flexibility.
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