Rising Fuel Prices: A Domino Effect

The recent increase in gasoline and diesel prices is triggering a true chain reaction. From motorists to businesses, and including large retailers and restaurants, everyone is experiencing an immediate rise in costs, which is expected to be passed on to consumer prices in the upcoming weeks.

Motorists: Monthly Costs Rise from Rs 580 to Rs 1,444

Starting Thursday, April 16, the price of a liter of gasoline jumped from Rs 58.45 to Rs 64.25. This increase is immediately felt in the wallets of drivers, who are forced to reassess their spending.

"Usually, my weekly fuel budget is around Rs 1,200. Now, I have to account for an extra Rs 85 per week, which adds up to about Rs 340 more per month. Meanwhile, everything is going up: bread, cooking gas... Nothing is going down. In the end, it’s a real imbalance for our budget," worries Ketty Gracieuse, an employee at a school. "Whether prices go up or not, we have no choice. Gasoline is essential. But it digs a hole in our budget," adds Anil B., who works for a private company.

The numbers speak for themselves. For a motorcycle, the monthly cost rises from about Rs 877 to Rs 964. For a large motorcycle, the budget climbs from Rs 2,396 to Rs 2,634, which is an additional cost of Rs 238. For car owners, the monthly bill increases from Rs 580 to Rs 1,444, depending on the model.

At the gas stations, Binesh Peryagh, manager of Renown Shell in Quartier-Militaire, anticipates a change in behavior among some consumers. "Some will reduce their consumption. They will continue to spend the same amount, but will take home fewer liters, as their salaries have not increased," he explains.

Businesses: Balancing Cost Absorption and Price Increases

The price of diesel has risen from Rs 64.80 to Rs 71.25 per liter, immediately increasing operational costs for businesses. Four companies share the tangible impact on their operations.

SKC Surat: Millions of Rupees in Additional Costs Each Month

The diesel price hike hits SKC Surat hard, where logistics is the second largest expense after salaries. With a fleet of 40 vehicles operating daily across the island, transport already accounts for 25% to 30% of costs. "This new increase translates to millions of rupees in additional costs each month," says Suren Surat, CEO of SKC Surat. He adds, "We won’t be able to pass on this increase because we operate in a food sector dominated by perishable goods and intense competition. A price increase not matched by competitors could lead to unsold goods, resulting in significant losses."

Topodom Distribution: Price Increase on the Agenda

At Topodom Distribution Ltd, rising costs are significantly reducing profit margins. The company tries to absorb some of these increases, as it has done in the past, but this strategy is reaching its limits. "We can no longer continue to absorb additional costs. We will evaluate whether we need to raise prices. We don’t want to do this, but in the face of persistent costs, we don’t really have a choice," states Sandra To, Marketing Manager at Topodom Distribution Ltd.

SSS Furniture: Quotations Reduced to Two Weeks

For SSS Furniture, transport accounts for 15% to 20% of costs, including material delivery, shipping, and site visits. "With the new diesel price increase, this cost becomes even heavier to bear," emphasizes Maya Sewnath, director of SSS Furniture. In this unstable context, the company is considering revising its business practices. "Quotations, previously set for three months, will now be limited to two weeks," she indicates. For Maya Sewnath, the ongoing price surge creates a domino effect that will inevitably impact consumers.

Panagora: Significant Additional Burden Despite Green Investments

At Panagora, energy constitutes the third largest expense. The rise in diesel prices therefore represents a significant additional burden, the impact of which is still being assessed. "We are still analyzing the impact of this second diesel increase, but it is clear that it adds a burden to our operations," explains Yovan Jankee, Sustainability & Communications Manager at Panagora.

However, the company has invested in solutions to improve its energy efficiency. "Panagora has invested over the years in various projects to enhance its energy consumption, including photovoltaic solutions. It is noteworthy that we have covered almost all available surface area at our logistics site with solar panels, currently generating about 35% of our consumption. We have also studied the feasibility of transitioning to hybrid/electric mobility and invested in hybrid vehicles for part of our fleet... but significant technical challenges remain," highlights Yovan Jankee.

Despite these efforts, rising energy costs are undeniably burdensome. "Panagora continues its efforts for more efficient energy consumption, but it is clear that rising energy costs will impact us, despite all our measures. We will have more visibility in the coming weeks regarding the direct repercussions for our clients and consumers. At this stage, we are still analyzing all the costs affected by the Iran crisis," concludes Yovan Jankee.