South Africa News Brief and Action Alert

South Africa: Work From Home Policy May Lessen Demand for Petrol; Increased Electricity Prices Likely

May 14, 2022May 12, 2022

The Russian invasion of Ukraine has resulted in a global increase in oil prices. Towards the end of February 2022 when Russia invaded Ukraine, oil prices went above $100 per barrel for the first time since 2014 [1].

In South Africa, the price of petrol increased by R1.86 to R21 per litre in March 2022 [2]. In April 2022, it is anticipated that the price of petrol will increase by R1.73 to R1.81 per litre and the price of diesel will increase by R2.97 to R3.12 per litre [3]. This will result in a financial burden for people who have to commute to work. The government of South Africa has indicated that people who can work from home can do so in order to save on travelling expenses [2].

The effect of the Russian invasion on Ukraine will not have any immediate impact on the climate change indicators for South Africa. However, should the work from home policy be adopted all across South Africa, fuel consumption might go down. As observed in 2020 during periods of strict COVID-19 lockdown in South Africa, which were between the end of March to June, petrol and diesel consumption decreased significantly, as can be observed in the figure below. Compared to the first quarter of 2020 (January to March), diesel and petrol consumption decreased by approximately 26% and 36%, respectively in the second quarter (April to June) due to a strict lockdown where travelling was limited.

Diesel and petrol consumption (in billion litres) in South Africa in 2020

Compiled using Energy Statistics from the Department of Mineral Resources and Energy [4].

Reduction in fuel consumption leads to a reduction in GHG emissions. According to the International Energy Agency [5], if everyone across the globe who is able to work from home actually does so for just one day per week, the global oil consumption for road passenger transport will decrease by approximately 1% and CO2 emissions will decrease by approximately 24 million tonnes per annum. Thus, work from home policy should be implemented as an attempt to reduce the financial burden of increased petrol and diesel prices and to reduce GHG emissions.

South Africa has been facing frequent load shedding over the years as Eskom, the state-owned electricity utility, has been unable to meet the electricity demands of the country. Most of Eskom’s power stations are coal-fired. However, Eskom also currently uses Open Cycle Gas Turbines (OCGTs) to prevent power outages. These OCGTs run on diesel, and it is estimated that Eskom currently uses 9 million litres of diesel daily to operate its gas turbines [6]. If diesel prices keep on increasing due to the Russian invasion of Ukraine, Eskom will face major financial constraints in keeping its gas turbines in operation, which might lead to more load shedding or customers having to face huge increases in their electricity bills. In fact, there will be a 9.61% increase in the price of electricity for customers purchasing electricity directly from Eskom as from April 2022. For customers who purchase electricity from the municipality, a price increase will come into effect as from July 2022 [3].

A conflict between any two countries in the world leads to the loss of lives and livelihood, adds a financial burden on people, causes damage to the environment and affects the overall wellbeing of the planet.

References

This Post was submitted by Climate Scorecard South Africa Country Manager Deepti Charitar

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