JOHANNESBURG – It’s been a year since the first case of Covid-19 was reported in South Africa on March 5, and what a roller coaster it has been. Although most South Africans haven’t travelled as much, fuel prices have still played with our emotions, plunging and rising again due to the volatility of oil prices and the local currency.
On Wednesday, March 3, motorists were hit with yet another increase, bringing the price of a litre of 95 Unleaded Petrol (ULP) to R15.62 at the coast and R16.32 inland, where the more commonly used 93 Unleaded Petrol rose to R16.15. This is a sharp rise from the R11.52 that South Africans paid for a litre of 95 ULP at the coast back in May 2020, following the Covid-related crash of the oil market.
Oil prices have risen since then as the rollout of vaccines has buoyed the global economy, and at the time of writing Brent Crude was trading at a shade under $64 a barrel – consider that it plunged to around the $20 mark at the height of the Covid-19 crisis in early 2020.
But while South African motorists and consumers are certainly feeling the fuel price pinch, how exactly have local fuel prices changed in historical terms? To get an idea of how prices have changed in the last 10 years, we gathered some data from the Automobile Association’s fuel price index on its website, and it makes for some interesting reading.
*Data courtesy of the AA
Close to all-time highs
The price of 95 Unleaded petrol at the coast has increased from R9.18 in March 2011 to R15.62 in March 2021, while the inland price of 93 ULP rose from R9.27 to R16.15. However, the current price is not an all-time high, as 93 ULP hit R16.85 in October 2018, during the last oil price spike.
What about diesel prices?
The diesel picture is a bit harder to paint as the energy department only releases wholesale prices for this fuel type, but for what it’s worth, the cost of low-sulphur diesel at the coast rose from R8.71 in March 2011 to R13.58 in March 2021. That’s a much lower percentage (56%) than the petrol hikes, which amounted to 70%.
But how do these petrol price increases compare to general inflation?
We took the March 2011 price of 93 unleaded petrol (R9.27) and adjusted it for inflation using the annual Consumer Price Index (CPI) inflation figures and the end result was a price R15.15 for March 2021. This means that petrol costs exactly one rand more than it should, if it were simply adjusted in accordance with consumer inflation. Of course, in reality the picture is a lot more complicated than that.
Taxes putting motorists under pressure
There are many factors that influence the price of fuel besides the volatile oil and currency markets and the elephant in the room here is fuel taxes, which increase on an annual basis.
This is set to pinch consumers once again in April, following the announcement by Finance Minister Tito Mboweni last month that fuel levies would increase by 27 cents in total. This comprises a 15 cents per litre rise in the general fuel levy, while the Road Accident Fund levy is set to increase by 11 cents and the Carbon Fuel levy by 1 cent.
This will see the General Fuel Levy rise from the current R3.77 to R3.92, while the Road Accident Fund levy will increase from R2.07 to R2.18.
Now consider that without these taxes, your fuel would be R6.10 cheaper!