When the fuel price reached a record high of over R20 per litre last year, South African motorists were forced to dig deeper into their pockets. But economists now expect another sharp increase in the coming weeks.
According to analysts at professional services firm PwC, the nature of fuel price fluctuations suggest that it is only a matter of time before the R20/litre barrier is breached again.
The firm reports that in the third week of January, international oil prices climbed to a seven-year high, suggesting fuel prices will again increase in early February.
“When the R20/litre threshold was first seen on the horizon in 2021Q3, there were renewed calls for a review of the fuel price structure. At present, only about 45% of the price paid at forecourts goes towards funding the actual liquid fuel received by the buyer.
“The remainder is divided between wholesale, retail and distribution margins (~15% of the total cost) as well as a list of taxes, levies and duties (~40%). This includes a fuel levy of nearly R4/litre that is not directly allocated to transport-related functions — the money goes into the general government revenue pool,” PwC expressed.
The Automobile Association of South Africa has also launched a petition to review the country’s petrol price and how it is calculated.
“A comprehensive, long-term analysis of the components of the fuel price needs to be done as a matter of urgency, and that all calculations relating to the fuel price be audited to determine if they are still relevant and appropriate to South African conditions,” the AA adds.
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