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Further fuel price pain

Another hike at beginning of August

As protest action grips the country over the fuel price – and particularly the tax component built into the price – the AA has warned that a further price increase is likely.

Adding salt into the wounds of consumers, and particularly the poor, the outlook for August indicates another price hike is on the cards at the end of July going into August.

In a statement the association said, “International oil prices see-sawed during the first half of July‚ but remained within a fairly narrow band and did not contribute substantially to the price rises we are anticipating for next month.”

Current data suggested “a price rise of 19 cents a litre for petrol‚ 13 cents for diesel‚ and 22 cents for illuminating paraffin,” the AA said as reported in Times Live.

The rand was a big factor and volatility in the exchange rate would influence the extent of the increase.

Fuel price fluctuation: The AA

Meanwhile truck drivers and tow truck drivers were among those who took part in protests on freeways in the province on Wednesday over the ongoing increases and the high fuel prices.

eNCA reported that nine people were arrested for public violence following the protests in Durban on Wednesday morning.

Protesting motorists had blocked off the N3 in Pietermaritzburg and the N2 in Durban, near Chatsworth, demanding that petrol prices be decreased.

KZN Police said eight men and one woman were arrested for public violence.

Messages circulating on social media called for support for the road closures and warned of further protests in the coming days.

Little leeway to change

A Moneyweb report stated that the fuel price comprises two elements: The cost to manufacture and distribute fuel, and a range of taxes and levies.

Many costs associated with getting a litre of fuel to your vehicle are fixed and there is little leeway for change.

“There is little leeway to change either of these components in a way that it would make a noteworthy difference to the price at your local filling station.”

Currently, the basic cost of a refined litre of petrol in SA is set at R7.60. This is effectively the cost to produce fuel anywhere in the world.

Moneyweb reported that other real costs include long distance transport, local delivery and the margins for filling stations.

“These costs amount to R3.12 per litre, resulting in a total cost of R10.72 per litre. This includes all the costs such as salaries and profit margins, to put a litre of fuel in a car’s tank.”

Taxes and levies add R5.30 to the price of every litre of petrol and diesel. The general fuel levy (tax to treasury) is R3.37 per litre, while R1.93 per litre goes to the Road Accident Fund (RAF).


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