South Africa’s recent petrol price decrease brought a momentary relief amid ongoing economic pressures. On 1 November, petrol prices dropped nearly R2, yet concerns linger over the persistently high fuel costs.
A retrospective glance reveals a worrying trend: in the last three years, petrol prices have risen 21 times but only decreased 12 times.
According to IOL Motoring, a stark example of this trend is the price trajectory of unleaded petrol. From November 2020 to the present, its cost soared by R9.56 per litre, marking a 68.8% increase. Compared to previous years, this rate of escalation is alarming, with the price now R4.12 higher than two years ago and 87 cents more than last year.
Also read: Here are the official petrol and diesel prices for November
September 2023 saw the most significant single increase of R1.71, while January witnessed the largest decrease of R2.06.
Despite a current price below the July 2022 peak of R26.31, petrol prices have consistently outpaced inflation. Adjusting for inflation using the Consumer Price Index (CPI), the current petrol price significantly exceeds the expected R16.46.
The global context offers some explanation. Post-Covid recovery and the Russia-Ukraine conflict have driven oil prices upward, impacting South Africa’s fuel costs. Moreover, the rand’s depreciation, from R16.30 to R18.43 against the US dollar since November 2020, has played a role.
Yet, South Africa’s fuel pricing woes are compounded by heavy taxes, including the General Fuel Levy and Road Accident Fund levy, adding R6.13 to every litre.
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Diesel prices paint an even grimmer picture, with a staggering 98.5% increase in the past three years. The wholesale price of 50 parts per million (ppm) diesel escalated from R12.29 to R24.40 per litre. Adjusting for inflation, the price should ideally be around R18.03, far below the current level.
Fuel price dynamics are a complex interplay of global market forces, local taxation policies and geopolitical tensions.
The Automobile Association (AA) of South Africa advocates the need for a thorough analysis of these factors to understand and possibly mitigate the burden on consumers.
As the situation stands, South African motorists continue to face challenging times ahead with fuel costs.
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