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Adulting: Petrol price empties our wallets’ fuel

We told you two weeks ago to tighten your belts, as we’re facing several price increases. The first was electricity (we’re still watching whether Nersa will grant Eskom its proposed 20.5% hike). We also saw interest rates increase last week and now…the anticipated hike in petrol prices kicked in on Tuesday evening. We hope you fueled up with the remainder of your last salary. (And perhaps for Valentine’s Day you could just take a nice, romantic walk? 😉).  

Petrol 93 and 95 increased by 53 cents a litre while diesel went up by 80 cents a litre and illuminating paraffin rose by R1.01 per litre. 

The increase was mainly driven by the high price of Brent Crude oil; this pushed up the overall price of fuel. It could have been worse: thankfully the strong rand to dollar exchange rate cushioned the blow for us. But other factors are contributing to the fuel price:

🔹The cost to import fuel (petrol is South Africa’s largest single import), 

🔹Regulating costs and profits for wholesale retailers and transport services, and 

🔹The tax and levies that go to the Road Accident Fund (controlled by the government) to insure road accident victims. 

It doesn’t HAVE to stay that way. With petrol prices hovering around record levels, the Automobile Association (AA) has called on the government to review how the petrol price is calculated. That’s because we’re still using a petrol regulating system that goes as far back as WWII (we know 😪) because they protect investors’ profits in the value chain (of course 🙄), according to a great explainer in The Conversation. 

A global comparison of petrol prices shows that in mid-2021 South Africa’s fuel price was at R17.20 –  just above the average of R16.97 at the time. That put us at 91 among the 167 regions analysed by the Global Petrol Prices report. 

Where does that leave us? If you’re up for it, the AA has started a petition called #ReviewTheFuel, which has already garnered over 25 000 signatures. WhatsApp subscribers, check out the link in the PDF. 

This article appeared as part of The Wrap, 3 February 2022. Sign up to receive our weekly updates.