South Africans got hit with another increase in the petrol price, taking the price up to over R20. The price increase has come as a shock to many South Africans who will now find it even harder to fork out the cash to travel during the festive season.
South Africa is under immense pressure financially, and many South Africans can no longer afford the burden of a disrupted and corrupt country.
Below is a breakdown of the fuel price and where the money gets allocated:
Fuel levy: R3.83
Road Accident Fund levy: R2.13
Wholesale margin: R0.41
Retail margin: R2.23
Other levies such as a carbon tax, slate levy, and transport costs: R1.43
Total: R10.03
This amount makes up a large portion of the new fuel price and South Africans are frustrated. Unfortunately, the coming months look bleak, with FNB projecting double-digit inflation for fuel prices to persist until March 2022 at the least.
However, the main pressure of the fuel price hike has been the increase in the Brent crude oil price over the last few months. These prices are driven by shortages in natural gas in Europe and Asia as winter hits.
There are many reasons why fuel prices can rise at unprecedented rates, but the prime culprits are strong oil prices, a weak rand, and high taxes. The combination of all three not working in South Africa's favour has seen a price increase of over 40% in the last year alone.
Unfortunately, the latest petrol price may have devastating consequences for consumers, affecting the festive season and the new year. It may be time for consumers to change their lifestyle and spending habits to accommodate paying for up to R50 more per tank.
Article by:
Nadia Gmeiner
Marketing Manager
VAT IT SA