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We take a look at the average price per kilogram of crude oil imported into South Africa from January to September of each year and compare that to the average fuel price from January to September of each year.
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Crude oil per kilogram vs petrol price
So just how much has crude oil price increased over the last couple of years? And does South Africa's petrol price move in tandem with the prices of South Africa's crude oil imports. Well the short answer to this is no, not really. The average price of a kilogram of crude oil is lower than the levels seen in 2012 to 2014. Yet our fuel prices paid at the pump is a lot higher than it was back then. And for clarity purposes we are referring to the Rand price per kilogram of crude oil imported. So it takes into account both the international crude oil price as well as exchange rate fluctuations. And all data obtained from the customs data as published by SARS.
The graphic above shows that in 2010, the price of petrol per litre at the reef was just about double the price paid per kilogram of crude oil. And come 2018, the price of petrol at the reef is far more than double the price of a kilogram of crude oil imported. The next chart shows the percentage the petrol price per litre is more than the price per kilogram of crude oil.
So why this divergence over time from the petrol price at the reef being just under double the price of a kilogram of crude oil? And why is South African fuel prices higher now than it was in 2014 when the current price per kilogram of crude oil is far less than it was in 2014. Well we as South Africans can all thank the South African government for that.
The South African government has been milking the fuel levy and the road accident fund tax and slapping that on our petrol price. Year after year without fail the South African government has increased the taxes levied on fuel. And to rub consumers faces in ot, they then added E-tolls to Gauteng and expect Gautengers to pay E-tolls too. And paying taxes is one thing, the South African government should remember the following though, SARS pays 89c to collect R100 in taxes, E-tolls pays around R68 to collect R100. Why should the people of Gauteng, and South Africa at large except such inefficient form of tax collection? Seems the South African government is just starting to tax things for the sake of taxing.
The South African government has been milking the fuel levy and the road accident fund tax and slapping that on our petrol price. Year after year without fail the South African government has increased the taxes levied on fuel. And to rub consumers faces in ot, they then added E-tolls to Gauteng and expect Gautengers to pay E-tolls too. And paying taxes is one thing, the South African government should remember the following though, SARS pays 89c to collect R100 in taxes, E-tolls pays around R68 to collect R100. Why should the people of Gauteng, and South Africa at large except such inefficient form of tax collection? Seems the South African government is just starting to tax things for the sake of taxing.
Government will argue the E-tolls needs to be paid to improve and maintain the Gauteng freeways. Well actually no. Taxes collected via personal income tax (PIT), corporate income tax (CIT), VAT, customs and excise duties etc, should have been used for such upgrades and maintenance. Government's mismanagement of collected taxes is no excuse to tax South Africans even more.
So when South Africans wonder about the fuel price and why it is so high, it is so high because of all the taxes the government keeps adding to the fuel price, and the new finance minister has warned that substantial increases to the RAF is required to keep it afloat. Buckle up South Africans, as the petrol price seems set to keep reaching new highs. Or perhaps get cycling, to save on fuel costs, and to hit government where it hurts. No fuel bought, no taxes collected. Only way to get a government to spend and borrow less is to pay less taxes. Perhaps active VAT and fuel levy avoidance should be implemented to send a clear message to government.
So when South Africans wonder about the fuel price and why it is so high, it is so high because of all the taxes the government keeps adding to the fuel price, and the new finance minister has warned that substantial increases to the RAF is required to keep it afloat. Buckle up South Africans, as the petrol price seems set to keep reaching new highs. Or perhaps get cycling, to save on fuel costs, and to hit government where it hurts. No fuel bought, no taxes collected. Only way to get a government to spend and borrow less is to pay less taxes. Perhaps active VAT and fuel levy avoidance should be implemented to send a clear message to government.