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We take a look at the latest fuel prices announced by the department of energy and for once South Africans will be very happy to hear that fuel prices will be declining sharply from 3 July 2019.
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So the fuel price story is pretty sad?
The line graphs below shows the monthly retail petrol price for 95 Octane petrol at the Reef (inland) vs the 95 Octane petrol price at the coast over the last number of years and the underlying trend in the fuel price as can be seen from the line graph below is a steady upwards slope with little to no reprieve for South Africans. With the April 2019 fuel price 95 Octane for those living in Gauteng for example sitting at R16.13 a litre. Compare this to the price of R14.01 in January 2019. Thats a R2.12 (13.14% increase in the fuel price in the last 3 months).
The November 2018 fuel prices were officially the highest retail fuel prices ever paid in South Africa, beating the highest fuel prices in history of the previous month and the month before that. While South Africans had a short reprieve from rising fuel prices in December 2018 and January 2019, the Rand has weakened since December and the world crude oil prices are substantially higher which is a lethal cocktail for rising fuel prices and in the end inflation and interest rates. With the current continued increases in the fuel prices we expect inflation to pick up from current levels pretty soon, as transportation costs starts playing a role on the prices consumers pay for fast moving consumer goods that are transported via trucks from manufacturers and wholesalers to retail outlets.
The South Africa government, desperate to collect more taxes decided to raise the fuel levy and the road accident fund levy effective April 2019, so these increases are now a permanent feature of the latest fuel price. And so is the carbon tax implemented in May. Currently more than 50% of the fuel price will be made up by taxes, margins, levies and other costs. Only two things in life are certain, that is death and taxes. And in South Africa it seems that the government wants to combine the two by taxing its citizens to death.
Below a paragraph released by the Department of Energy regarding the latest fuel prices announced for July 2019 that will come into effect on 3 July 2019.
The main reasons for the fuel price adjustments during the period under review include local and international factors. On the international front, during the period under review, the Rand depreciated on average against the US Dollar from 14.41 to 14.62 Rand per dollar during the period under review compared to the previous one. This led to a higher contribution to the Basic Fuel Prices on petrol by ten comma six cents per litre (10.60 c/l), diesel and illuminating paraffin by eleven comma six cents per litre (11.60 c/l). The main reason for the decrease was the fact that the Brent Crude Oil Price decreased from 71.29 US dollars (USD) per barrel to 63.60 USD per barrel during the period under review. The drop in the oil prices were due to the high level of U.S. stock inventories which resulted in more supply in the markets and uncertainty surrounding the conclusion of trade deal between the United State of America and China. This led to lower prices of all the petroleum products in the international markets. The Slate Levy will be reduced by eight comma seven eight cents per litre (8.78 c/l) from thirteen comma one six cents per litre (13.16 c/l) to four comma three eight cents per litre (4.38 c/l) in line with the Self-Adjusting Slate Levy Mechanism Rules. Effective from 3 July 2019, the Slate Levy on Petrol and Diesel will be four comma three eight cents per litre (4.38 c/l) cents per litre. At the end of May 2019, the combined cumulative Slate Balance on Petrol and Diesel amounted to minus R555.90 million.
The South Africa government, desperate to collect more taxes decided to raise the fuel levy and the road accident fund levy effective April 2019, so these increases are now a permanent feature of the latest fuel price. And so is the carbon tax implemented in May. Currently more than 50% of the fuel price will be made up by taxes, margins, levies and other costs. Only two things in life are certain, that is death and taxes. And in South Africa it seems that the government wants to combine the two by taxing its citizens to death.
Below a paragraph released by the Department of Energy regarding the latest fuel prices announced for July 2019 that will come into effect on 3 July 2019.
The main reasons for the fuel price adjustments during the period under review include local and international factors. On the international front, during the period under review, the Rand depreciated on average against the US Dollar from 14.41 to 14.62 Rand per dollar during the period under review compared to the previous one. This led to a higher contribution to the Basic Fuel Prices on petrol by ten comma six cents per litre (10.60 c/l), diesel and illuminating paraffin by eleven comma six cents per litre (11.60 c/l). The main reason for the decrease was the fact that the Brent Crude Oil Price decreased from 71.29 US dollars (USD) per barrel to 63.60 USD per barrel during the period under review. The drop in the oil prices were due to the high level of U.S. stock inventories which resulted in more supply in the markets and uncertainty surrounding the conclusion of trade deal between the United State of America and China. This led to lower prices of all the petroleum products in the international markets. The Slate Levy will be reduced by eight comma seven eight cents per litre (8.78 c/l) from thirteen comma one six cents per litre (13.16 c/l) to four comma three eight cents per litre (4.38 c/l) in line with the Self-Adjusting Slate Levy Mechanism Rules. Effective from 3 July 2019, the Slate Levy on Petrol and Diesel will be four comma three eight cents per litre (4.38 c/l) cents per litre. At the end of May 2019, the combined cumulative Slate Balance on Petrol and Diesel amounted to minus R555.90 million.