Another petrol price increase and how this affects you
When did the petrol price increase?
On Wednesday, 4 October 2023 South Africans got dealt another heavy blow with another fuel price increase.
The current petrol and diesel prices in October in South Africa
|
Inland |
Coastal |
|
|
93 Petrol |
R25.22 |
R24.50 |
|
95 Petrol |
R25.68 |
R24.96 |
|
Diesel 0.05% |
R25.02 |
R24.29 |
|
Diesel 0.005% |
R25.22 |
R24.53 |
*Data for table supplied by BusinessTech
Why was there another fuel price hike in South Africa?
The reason for the petrol price increase in SA is that around 80% is as a result of the international oil price.
In a recent interview with eNCA, The Automobile Association’s , Layton Beard said, “I think the only solace we can take from that is that we’re not isolated and that there are many other countries in the same boat as us”
He went on to say:
“This isn’t a problem that’s unique to South Africa and unfortunately the oil price is moving in the wrong direction and we have to wait and see how that’s going to impact.
If the trend is anything to by, it’s certainly negative across the board”
The Department of Mineral Resources and Energy (DMRE) has said that the reasons for this price increase is:
- Higher oil prices leads to an increase of international product prices for petroleum.
- A major contributing factor of rising oil prices has been a decrease in supply from the Organisation of Petroleum Exporting Countries (OPEC) and Russia. So while less oil is being exported, they make a larger profit on each barrel of oil they sell.
- The Rand/Dollar exchange rate.
- Slate Levy (fuel levy is self-adjusting and is what government uses to deal with the differences in petrol prices).
Why can't the government just reduce the fuel price by reducing or taking away the fuel levies?
“It would be counterproductive to get rid of the fuel levy because our government would just look for other ways to get that R90 billion it gets from the fuel levy.
Yes, one litre may cost less, but so many other things would cost more. It’s not simply a question of removing that fuel levy from that price of fuel, it’s a question of what is government doing to mitigate against that in terms of all other issues around the fuel price?”- The Automobile Association, Layton Beard
He instead suggests that we should perhaps look at the RAF levy which is R2.18 on every litre of fuel. Beard says what we should be asking as a country is if we’re getting a benefit from the Road Accident Fund. “At the moment, our [AA] view is no, we’re not.”- The Automobile Association, Layton Beard
How the petrol price increase affects South Africans
An increase in the price of petrol doesn't just mean motorists have to fork out more money to fill their tanks, it also has knock on effects for consumers in other ways:
- Increases in fuel prices means that businesses now have to pay higher transport costs to transport their goods and services. These costs are usually absorbed and felt by consumers at the till with an increase in the price of these goods and services.
- Increase in fuel prices can affect inflation which could have further negative effects on already high interest rates.
Why is the cost of living so high in South Africa?
The increase of the cost of living in South Africa is because the budgets of South Africans are being squeezed from all sides. South Africans have had to deal with increases across:
- Food prices
- Petrol prices
- Electricity
- Interest rates
Read: How you can manage your money during a cost of living crisis