Tag: petrol price hike

Week after week, there is always a petrol price hike threat to consumers in South Africa. Over a period of 10 years, the petrol price has fluctuated, increasing by a whopping 66% from R9,66 to R16,08. In the last 8 months of 2018, the price has increased from R14,42 to R16,08 inland.

The price hikes in 2018 alone placed a strain on the consumers and prompted the public outcry that led to the subsequent intervention by the government. The Department of Energy intervened after the Automobile Association (AA) of South Africa anticipated a drastic 23c to 25c per litre fuel price increase for the 5th of September 2018. The intervention led to the fuel price only increasing by 4.5c per litre.

According to Central Energy Fund calculations, local consumers could be hit by another bombshell as early indicators are that the fuel price could rise by R1.14 a litre in October. Making matters worse is the shock of the recession and the threat of downgrades by rating agencies.

OLX believes this directly affect more than three thirds of their users. “While OLX prides itself for making it super easy to buy and sell almost anything, our main source of traffic is price-conscious car buyers,” says Diana Mjojo, Communications Manager at OLX South Africa. “With the fuel prices going up again, this is a trend we don’t see coming to an end any time soon and we’re concerned about how it affects our users.”

9 out of the top 10 search terms for 2018 on the OLX platform are for the Cars & Bakkies category. According to the company, the OLX car buyer is financially savvy. They are willing to accept higher mileage vehicles if it means the price of the vehicle is lower.

Mjojo says OLX users are willing to save as much money as possible during these economically hard times. “Users will often pick the practical option over luxury, which may include older models, if it means the vehicles are cheaper. Not only are they conscious about the price of the vehicle but about the petrol consumption as well,” says Mjojo.

OLX advises consumers who aren’t already buying their cars on the platform to consider doing so as that is a smart way to save and set yourself economically free. “Whether you are looking for your first car, need a car to match your muscles or upgrading, OLX is a central place for you. We work with car dealerships that list their approved cars on the platform,” adds Mjojo.

Petrol price triples in a decade

By James de Villiers for Business Insider SA 

The price of a litre of petrol in South Africa increased from R6.92 in July 2008 to R15.53 in July 2018 at the coast, and from R7.16 to R16.02 inland – nearly tripling in the last decade.


Infographic: Fin24

Over the same period, the tax (or fuel levy) on a litre of petrol increased from a low of R1.27 in July 2008 to R3.37 in July 2018.

This means the tax on fuel increased by 165.35% in 10 years.

On Sunday, the department of energy announced that a litre of unleaded petrol will increase by 26c, pushing the price of a litre past R16 in the inland for the first time.

Energy Minister Jeff Radebe ascribed the increasing petrol price to the rand’s poor performance to the US dollar.

Radebe said the increase would have been 20c more if it wasn’t for declining oil prices.

Who has our petrol?

Cash-strapped consumers face another hefty petrol hike as The Department of Energy announced on Monday that a litre of 95 octane petrol will cost R14.01 inland and R13.52 at the coast from Wednesday.

And if that is not enough, the Central Energy Fund board chairperson has said that the fund is still busy calculating how much SA lost when 10.3 million barrels from its strategic fuel reserve were sold off in 2015.

The Central Energy Fund (CEF) can not yet say what price SA paid for the controversial sale of 10.3 million barrels of the country’s strategic oil reserves, or who now owns the stock, according to the chairperson of its board Luvo Makasi.

The secret sale by the Strategic Fuel Fund (SFF) – which is a subsidiary of the CEF – took place in December 2015, at a time when oil prices were at a historical low point.

Speaking to Power98.7 radio host Onkgopotse JJ Tabane on Monday evening, Makasi said that the CEF was still investigating the sale.

Bloomberg reported last month that law firm Allen & Overy led an investigation into the sale, which included a recommendation that a financial analysis of the sale be conducted.

But the fact that the analysis was completed by embattled auditor KPMG SA has caused delays in making the report public.

READ: Energy Minister wants assurance on KPMG analysis of oil sale
Minister of Finance Malusi Gigaba last month advised all government departments and entities to review all work done by KPMG to ensure their audit processes had not been compromised.

First rotation, then sale

In March 2016, three months after the sale took place, then-energy minister Tina Joemat-Pettersson claimed in her annual budget vote speech that the fuel had not been sold, but rotated.

“In 2015, we issued a ministerial directive for the rotation of strategic stocks by the Strategic Fuel Fund and this has resulted in the increased revenue base for SFF, whilst at the same time maintaining stocks within our storage tanks for security of supply,” she said at the time.

READ: AG to probe R5bn ‘secret’ oil deal
But earlier this year new Minister of Energy Mmamoloko Kubayi admitted the strategic fuel stock had in fact been sold off.

During Monday’s interview, Makasi also acknowledged the stock had been sold and not rotated.

But he said the CEF board was only involved in the transaction “at the end”, adding the board only got wind of the sale when a “a good amount landed in our (bank) account”.

A loss

Makasi acknowledged the fuel had been sold in a “depressed market” at a time when international fuel prices were low.

“If you look at where the market was at the time the product was sold, you would then have to make an assumption that there would have been a loss.

“But what we are busy with now, is we are trying to quantify what was the actual loss to the state,” he said.

He promised the CEF would “come back to the public” with the full details of what the loss amounted to.

Asked if anyone would be held responsible for the secret sale – which took place without the knowledge of National Treasury – Makasi reiterated that the scale of the losses first had to be established.

READ: MPs demand answers on ‘illegal’ fuel stock sale
“Where there is a loss, the Public Finance Management Act puts a positive implication on the board of CEF and all its subsidiaries to investigate those instances,” he said.

“So there will be consequences. And when those losses are established, there will be consequences on all those involved in the process.”

Makasi appeared to imply that the CEF was also still investigating who bought the oil.

“The stock never left our tanks,” he said. “But the question of ownership therefore, that is what we are busy now debating.

“There was an element of sensation around. (But) was there cause for concern? Yes there was.”

By Jan Cronje for Fin24

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