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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 come April 2019 the South African government will slap a whole host of increases on the fuel price, with the fuel levy and road accident fund levy going up as announced in the February budget speech by the minister of Finance, Tito Mboweni.
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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
The November 2018 fuel prices were officially the highest retail fuel prices ever 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 then the South Africa government, desperate to collect more taxes decided to raise the fuel levy and the road accident fund levy effective April 2019. This will see fuel prices close to the record highs 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).
By April 2019 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 the government wants to combine the two by taxing its citizens to death.
By April 2019 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 the government wants to combine the two by taxing its citizens to death.