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Latest fuel prices in South Africa for May 2019
Date: 30 April 2019 Category: Economics |
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We take a look at the latest fuel prices announced by the department of energy and it seems the decline in our fuel prices were short lived. With higher international crude oil prices and a weaker Rand the fuel prices are on the uptick again. And sadly for South African consumers the bad news doesn't end there.
Increased road accident fund and fuel levy increases as announced in the budget and the potential carbon tax being added to fuel prices to the government continues to squeeze struggling consumers, which will lead to an even bigger problem, an ever worse struggling economy. See our SA GDP page here. |
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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.
And the latest fuel levy and road accident fund levy increases announced in the February 2019 budget speech are also included in the latest fuel prices (in actual fact it was part of the fuel price increase in April 2019).
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 fuel prices are fast approaching the levels record levels reached in November 2018. And the problem with the rising fuel prices is the fact that the goods we consume needs to be transported from ships, warehouses and manufacturers to retail and wholesale outlets. So this pushes up transport costs, which will push up the cost of goods bought by consumers higher which fuels inflation. And higher inflation leads to higher interest rates, as the South African Reserve Bank (SARB) loves to raise interest rates (as they showed in November 2018 by raising rates when there was no real need for it).
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 May 2019.
"The average Brent Crude oil price increased from 66.03 US dollars (USD) per barrel to 70.82 USD per barrel during the period under review. The Oil prices rose to the highest level in almost six (6) months as the US government decided to eliminate sanction waivers that allowed buyers to import Iranian crude oil. Geopolitical issues in the Middle East and Venezuela have provided added upward impetus to oil as output curbs by the Organization of Petroleum Exporting Countries (OPEC) and its allies to keep supplies in check. This led to adjustments the contribution on the Basic Fuel Price of petrol, diesel and illuminating paraffin by about 53.00c/l, 1.0c/l and 2.0 c/l respectively. "
And the latest fuel levy and road accident fund levy increases announced in the February 2019 budget speech are also included in the latest fuel prices (in actual fact it was part of the fuel price increase in April 2019).
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 fuel prices are fast approaching the levels record levels reached in November 2018. And the problem with the rising fuel prices is the fact that the goods we consume needs to be transported from ships, warehouses and manufacturers to retail and wholesale outlets. So this pushes up transport costs, which will push up the cost of goods bought by consumers higher which fuels inflation. And higher inflation leads to higher interest rates, as the South African Reserve Bank (SARB) loves to raise interest rates (as they showed in November 2018 by raising rates when there was no real need for it).
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 May 2019.
"The average Brent Crude oil price increased from 66.03 US dollars (USD) per barrel to 70.82 USD per barrel during the period under review. The Oil prices rose to the highest level in almost six (6) months as the US government decided to eliminate sanction waivers that allowed buyers to import Iranian crude oil. Geopolitical issues in the Middle East and Venezuela have provided added upward impetus to oil as output curbs by the Organization of Petroleum Exporting Countries (OPEC) and its allies to keep supplies in check. This led to adjustments the contribution on the Basic Fuel Price of petrol, diesel and illuminating paraffin by about 53.00c/l, 1.0c/l and 2.0 c/l respectively. "