The Department of Minerals and Energy has given the go ahead for petrol stations to sell fuel via 'cash, debit, credit and hybrid cards'. Previously sales of petrol on credit were banned. The new regulation is designed to bring us into line with the rest of the world and to prepare for the World Cup in 2010. The prior regulations were to level the playing field whereby petrol prices are fixed by government and the extra cost of credit cards as well as reward schemes were seen as giving a 'benefit' which was outlawed under a fixed petrol price.
- Compare your credit cards
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Justmoney.co.za spoke to the Department of Minerals and Energy and we asked them if the cost of doing a credit transaction for petrol would be passed onto the consumer. They said that the costs would not be passed onto the consumer and that the petrol retailers would have to negotiate with the banks in order to reduce the transaction costs. The margins in retail petrol are slim and the department recognises that rural retailers who don't have volume power to negotiate won't be beholden to the new regulations. So if you are in the city you will be able to fill up on your credit card, but out in the country you may not be able to.
Another part of the regulations is that due to the fixed pricing regime retailers may not skew the market by offering a 'benefit' to consumers for filling up with petrol with them. If the consumer is to not be burdened by the extra costs of using a credit card then the retailers who don't have the economies of scale may not offer this facility. It is also unclear what the effect on rewards, discounts and airmiles will be for credit card use. The new regulations are clearly designed with 2010 in mind, but we shall have to see how the implementation goes as to who will win out, but the banks look to be the most likely to profit at this stage.