Well, they kept us waiting all weekend, but it’s that time again. It was speculated that the Central Energy Fund would announce the exact fuel price adjustments on Friday 31 August – in time for them to come into effect on 5 September – but that didn’t happen.
It was also expected that the price of fuel would go up by around 25c per litre, along with diesel by 28c and paraffin by 17c. Instead, the Department of Energy released a statement late on Monday afternoon to reveal that the price would instead be increased by 4.9c per litre – still due to come into effect on the 5th.
This puts the inland prices at:
While that may seem like cause for celebration, it really isn’t. The Department further stated;
Despite the fact that these increases were caused mainly by international factors, the department has decided to intervene temporarily for this month. This is a once off temporary intervention to provide some relief to motorists and consumers against fuel price hikes.”
As it stands, we’ve already seen the price of fuel rise by more than 27% since last year, and the impending escalation isn’t sitting too well with anybody. Economists have even warned that we could be looking at a price of almost R18 per litre by the end of 2018 and as much as R20 per litre by the end of 2019.
Fun times are ahead.
Of course, there isn’t too much we can do about it right now. South Africa is at the mercy of the international crude oil price. According to the Minister of Energy, Jeff Radebe, South Africa currently imports 49% of its crude oil from Saudi Arabia, 24% from Nigeria, 20% from Angola, 2% from Togo and 1% each from Equatorial Guinea, the United States, Cameroon and Ghana.
Adding to that, the rand’s weak showing against the US dollar is also a primary influencing factor, making the fuel problem in SA a very difficult problem to fix.
The fuel levy is the fourth biggest source of income for the government after income tax, company tax and VAT, and contributes 5% to national tax revenue.