Get ready to pay another 28c per litre (pl) for your petrol in on Wednesday. As we are only in the fifth month of the year, we shudder at the thought of what we’ll be paying by December. That of course mainly depends on the oil price and the value of the rand against the dollar, but it also depends on added extras. We’ve recently seen a 20c pl fuel levy rise and 8c pl for the Road Accident Fund; are there more to come?
Rather than a weak rand and a high oil price, it is the extras, currently accounting for 40% of the petrol price, which appear to be haunting our transport system.
Added to the basic fuel price, which include shipping and storage costs, there are eleven items which include the transport paid by inland motorists that are. These include refining, duties, levies, fuel tax, wholesale and retail margins; together these add up to a total of +- R5 pl. Therefore assuming the basic fuel price is to R7 pl, the pump price works out at R12 pl. This is the price set by the Government for the under/over recovery from the previous month, adjusted on the first Wednesday of every month.
On the chart plotting the price of Brent Crude and the dollar/rand exchange rate, using horizontal lines I’ve added the average petrol price per litre for five years. The sloping trendline shows the increases so far this year. On the far right of the chart, you can see that the current oil price of $119 per barrel and the current dollar/rand exchange rate of $1/R7,8 are not too different to how they were in August 2008. That was when the petrol price eased back to R10,40 pl from R10,70 pl. However it rapidly fell giving a year’s average of R7,47 pl. It started the following year at R6,01pl but rising to R7,93 pl the 2009 average was R7,35pl.
Dare we motorists hope for something similar to ease our current burden? Absolutely not! Four years ago it was the rapid gain in the value of the rand, and a plummeting oil price that saved the motorist. Obviously 2008 and 2009 petrol prices included the additional costs, but unable to locate this data, I can’t put a figure on them. My guess is that they must have been considerably lower than now. Therefore even if the oil price drops and the value of the rand improve reducing the basic fuel price to, say, R5 pl, we must still pay and additional R5 pl at the pumps.