Tag: hike

Huge petrol price increase looms

By Myles Illidge for MyBroadband

East Cape Fuels has revealed its estimated mid-month fuel price adjustment for March 2022, and it’s bad news at the pumps, with a considerable price hike projected for all grades of petrol, diesel, and paraffin.

Drivers of petrol will see unleaded 93 and 95 climb R1.23 and R1.24 per litre, respectively.

However, diesel vehicle owners will be hit the hardest once again, as they can expect 50ppm diesel to increase R1.37 per litre.

The price changes are as follows:

  • 93 unleaded petrol — R1.23 increase
  • 95 unleaded petrol — R1.24 increase
  • 50ppm diesel — R1.37 increase
  • Illuminating paraffin — R1.31 increase

East Cape Fuels is a petroleum supplier that provides mid-month price estimates. While it has often underestimated the actual price increase, it has rarely overestimated it.

With these estimated increases, unleaded 93 and 95 will cost R21.12 and R21.38 per litre, respectively.

The price of diesel will rise to R19.44 per litre.

These price increases could have a cascading effect in South Africa.

According to the programme coordinator for the Pietermaritzburg Economic Justice and Dignity Group, Mervyn Abrahams, the fuel price increases experienced in 2021 had already hiked food costs by 8.6%.

One development that could help motorists at the pumps, BusinessTech reported, is that this year could see a shift in trends regarding fuel taxes.

BNP Paribas South Africa senior economist Jeff Schultz explained that finance minister Enoch Godongwana’s assertion that fuel prices should be re-assessed could mean fuel taxes won’t rise sharply.

“Fuel and road accident fund levies have historically seen above-CPI increases,” Schultz said.

“However, this time could prove different given finance minister Godongwana’s assertion that the structure of South Africa’s fuel price should be re-assessed as consumers are grappling with record fuel prices and taxes and levies currently accounting for a third of domestic fuel costs.”

“Any decision will have to be carefully considered, though, given the general fuel levy alone brings in more than 1% of GDP in annual revenues, while the road accident fund has a growing claims backlog,” he adds.

By Jason Woosey for IOL

After a brief reprieve in January, South Africa’s fuel prices will once again move close to record levels in February, with 95 Unleaded petrol once again surpassing the R20 a litre mark in Gauteng.

On Monday, the Department of Mineral Resources and Energy said both grades of petrol would increase by 53 cents per litre, while low sulphur 50ppm diesel would rise by 79 c/l and 500ppm by 80 c/l.

This means that a litre of 95 Unleaded will cost R19.42 at the coast and R20.14 in the inland regions, where 93 Unleaded will rise to R19.89.

But how much more will a tank cost you from Wednesday, 2 February?

If you own a small hatchback like a Kia Picanto or Hyundai Atos, and assuming that you’ll be putting 30 litres of petrol into its 35 litre tank, then you’re looking at a cost of R582.60 at the coast and R596.70 inland, which is an increase of R15.90 over January. 35 litres in a Volkswagen Polo will set you back R679.70 (coast) and R696.15 (inland), which is R18.55 more than before.

The latest fuel price increases, while caused by surging international oil prices, come amid controversy surrounding the fuel taxes imposed on South African motorists. Taxes and levies add R6.11 to the cost of every litre of fuel sold in South Africa. According to The Organisation Undoing Tax Abuse (OUTA), the fuel levy increased by 116% between 2011 and 2021, while the Road Accident Fund contribution increased by 173%.

The Automobile Association has called for a review of the fuel pricing structure in South Africa, and its online #ReviewTheFuel petition has gained around 25 000 signatures so far.

“Our call is for the Minister of Finance to announce such a review in his Budget Speech in Parliament on 23 February as a first step towards mitigating against rising fuel costs effectively for the benefit of all South Africans,” the AA said.

 

Petrol breaks R20/litre mark

By Jason Woosey for IOL

South African motorists and commuters are facing a full blown crisis with both petrol and diesel set to go up by a massive margin from 1 December, pushing the petrol price past R20 per litre for the first time ever.

According to the Department of Mineral Resources and Energy, both grades of petrol will go up by 81 cents per litre from Wednesday, December 01, while 50ppm diesel will increase by 74 cents and 500ppm by 72 cents. Illuminating paraffin will rise by 42 c/l.

The December fuel price adjustment will see the cost of 95 Unleaded Petrol rising to R19.63 per litre at the coast and R20.35 in the inland regions, where 93 Unleaded will rise to R20.13.

The wholesale price of diesel will increase to R17.30 at the coast and R17.92 in Gauteng, keeping in mind that the unregulated retail prices (which vary between outlets) will be somewhat higher than that.

What is driving the price higher?

The price of Brent Crude oil increased marginally during the month of October, from an average of $82.50 per barrel to $83.00. This alone would not have made a big difference to the December fuel price, however, the rand depreciated from an average of R14.72 in the previous month to R15.85 this month, the energy department said. The Slate Levy, which is used to compensate the industry for cumulative under recovery, also saw an increase of 26.30 c/l.

Fuel taxes and levies currently account for R6.11 per litre of fuel, a fact which is proving increasingly controversial as higher oil prices and a weak rand drive prices up on a monthly basis.

Earlier this year, Outa released a graphic showing that more than 50% of the cost per litre of petrol is made up of levies:

AA warns of ‘catastrophic’ fuel price hike

By Jason Woosey for IOL

The fuel price situation in South Africa is threatening to turn into a full-blown crisis, with unaudited mid-month data from the Central Energy Fund indicating that petrol and diesel could see huge increases in November.

The petrol data is pointing towards a price increase of around R1 a litre, and the diesel situation is even bleaker – with a R1.40 increase looking likely.

Keep in mind, however, that these early predictions are based on unaudited data made available on October 14, and it is possible that the situation could change between now and the end of the month.

South Africans are paying record prices for petrol, and a R1 increase would see the cost of a litre of 95 unleaded petrol rising to around R18.60 at the coast and R19.33 in the inland regions, where 93 unleaded petrol could stretch to about R19.10.

A R1.40 diesel price hike would bring the wholesale price up to around R16.55 at the coast and R17.15 inland, keeping in mind that retail prices will be even higher than that as diesel prices are unregulated.

The predicted increases are as a result of surging international oil prices, with Brent Crude recently surpassing three-year highs. At the time of writing, the commodity was trading at $84.86 (about R1250) a barrel, which is $10 more than it was averaging in September.

The rand has mostly played on our side, spending most of October below the R15 to the dollar mark, and trading at R14.70 at the time of writing, however this has not been enough to offset the rising oil prices.

Unless oil prices soften in the coming months, the fuel price is set to cause more hardship for South Africans, as it affects not only the cost of commuting but also the price of food and other essential items that require transportation. Adding insult to injury is that illuminated paraffin is also looking set for an increase of around R1.40.

 

Source: Supermarket & Retailer

The price of foods in the supermarket trollies of families living on low incomes increased 7.8% (R250) between March and May 2020, the two months of lockdown so far.

The Pietermaritzburg Economic Justice and Dignity (PMBEJD) Household Food Basket survey for May said that lockdown restrictions had meant that children and workers had remained at home, so food ran out quicker, and women could no longer shop around for the cheapest prices, so women had to buy more core staple foods.

“Our research suggests families living on low incomes might be spending 30 percent (R973.93) more on food in May 2020, than they did two months ago,” PMBEJD director Mervyn Abrahams said in a statement yesterday.

The economic effects of the lockdown in South Africa on poor income families has been recognised by the government, with for instance, President Cyril Ramaphosa saying on Freedom Day “that for millions… this has been a month of misery, of breadwinners not working, of families struggling to survive and of children going to bed and waking up hungry.”

On Friday, the South African Food Sovereignty Campaign and the Cooperative and Policy Alternative Center (COPAC) inaugurated the National Food Crisis Forum (NFCF), which has as its aim the building of a partnership with government – which is operating its own food relief programmes – and the Solidarity Fund to address the food crisis in the country.

“Whilst our data is localised (the data is gleaned from shops in Pietermaritzburg most frequented by lower income earners), it is not unlikely that this picture is playing itself out in textured variations across South Africa,” said Abrahams.

He said their research found women, with no savings buffers, were taking on higher debt to absorb some part of the food shortfalls.

“Our findings…raise very serious questions regarding the adequacy of government’s interventions to help South Africans during the Covid-19 pandemic, particularly as financial shocks will continue even as the government moves to ease lockdown restrictions,” said Abrahams.

Over the period pre-lockdown (March 2) to May 4, the price of the PMBEJD Household Food Basket increased by R249.92 or 7.8 percent percent, taking the total cost to R3 470.92 in May. The year-on-year price increase was 13.8 percent.

Some staple food prices to have spiked over two months were rice (26 percent), cake flour (3 percent), white sugar (6 percent), sugar beans (18 percent), cooking oil (11 percent), white bread (15 percent), brown bread (14 percent), potatoes (8 percent), onions (58 percent), tomatoes (12 percent) spinach (13 percent) and cabbage (22 percent).

In Pietermaritzburg, women are typically buying more maize meal (the 25kg bag vs. 10kg), rice (the 25kg bag vs. 10kg bag), cooking oil (an extra 5L), flour (the 12,5kg bag vs. 10kg), potatoes (buying an extra 10kg) and cabbages (an extra 4 heads).

Social distancing in kombis and supermarkets had disrupted shopping procedures. Before Covid-19, women scouted around three to four supermarkets, and two to three butcheries to find the most affordable prices, including specials; and then bought the foods at the best prices.

Now, women were forced to shop in just one supermarket and one butchery.

In Pietermaritzburg, women typically drew on three main alternative money sources: omashonisa (loan sharks), spaza shop credit and cash loans, and stokvel savings and loans.

Food prices set to rise during 2019

By Dean Hutton for Bloomberg/Business Insider SA

Shoppers at Shoprite, Woolworths and Spar saw only small increases in food prices last year. But Shoprite is warning that prices could head higher in coming months.

Comparing prices at Shoprite and Checkers now, versus a year ago, there remains little evidence of price pressure.

Amid all the other pressures in the economy, food inflation has been the one relatively happy place the past year.

In its results this week, Shoprite reported that its prices only went up by 0.4% in the six months to end-December.

Woolworths said its food prices only increased by 1.2% in the same period, while Spar food price rose by only 1.4% – and the retailer says prices continue to fall across a wide range of grocery and perishable items.

In December, some 10,719 items in Shoprite and Checkers stores were cheaper than a year before.

The most notable price drops were among basic commodities such as frozen chicken portions, sunflower oil, rice, fat spreads and UHT milk across all our supermarket brands, a spokesperson told Business Insider SA.

However, the food price party could be drawing to a close.

In September last year, more than 11,600 items at Shoprite and Checkers were cheaper than a year ago, indicating that prices of almost 1,000 products have stabilised by December.

Shoprite itself is warning that prices will start to pick up. “The price of maize meal has already started increasing, which in turn will impact the cost of chicken feed,” the spokesperson said.

At the height of South Africa’s extreme drought in 2016, the white maize price reached R5,000 a tonne – which pushed up food inflation to more than 7%. However, following good rains in many parts of the country, the maize price fell to below R2,000 a tonne. Of late, however, the maize price is back around R3,000 amid renewed drought concerns.

“(Also), the price of sugar has traditionally over the past years increased in the first quarter of the year and we expect this increase to still be implemented,” Shoprite said. “Other categories to be affected will depend on factors such as inflated supplier prices, exchange rates, etc.”

Comparing prices at Shoprite and Checkers now, versus a year ago, there is little evidence of price pressures, however.

For now, the price of Huletts white sugar (2.5kg) remains unchanged at R34.99 from a year ago, at Shoprite.

The price of Ace Super Maize Meal (10kg) has actually fallen to R48.99, from a year ago (R52.88). A coffee brand like Frisco (750g) is also cheaper now (R54.99) than a year ago (R59.99). At Checkers, prices were also largely in line with twelve months ago, with some products like Sir Fruit juice falling from R29.99 to R25.99

The only big increase we could find was in sunflower oil, with the Helios brand (5 litre) up from R74.99 a year ago to R79.99

SA faces ‘biggest ever’ fuel hike in October

By Tom Head for The South African

You might have heard a few horror stories about the petrol price in South Africa soaring by R1 for next month. Well, we’re here to tell you it all seems completely true.

The AA forecast a rise of R1.12 per litre of petrol, and a whopping increase of R1.38 for diesel in October – a devastating blow that has been described as “the biggest single hike” in our country’s history. But what’s fuelling this crisis, and why are costs spiralling so dramatically? We’ve got answers.

Oil prices are nearing $100 a barrel
There’s a very bleak outlook for oil prices on a global scale. This is by no means a consolation, but it goes some way to explaining why it’s getting ridiculous in South Africa. It’s not just internal factors that have ramped up the petrol price. Some commentators believe oil prices will hit a 10-year high of $100 a barrel soon.

Tension between the US and Iran
It’s hard to accept, but the world tends to revolve around America at this point. While President Trump is taking a more hostile approach to foreign policy, Iran has become one of his targets. Now, the country is one of the biggest exporters of oil in the world, but there’s trouble on the horizon.

The US government are set to impose further sanctions on Iran while pulling out of an agreement regarding a nuclear deal achieved by the Obama Administration. Production is already dropping in the Middle-Eastern country, and further financial turmoil will have a negative effect on oil costs.

Countries not producing the goods
Energy Minister Jeff Radebe has highlighted that Libya produced 1.5 million barrels of oil a day before the regime collapsed in 2011. That number is now almost at a third of what it used to be.

Venezuela’s current crisis also got a mention. They are a member of the Organization for Petroleum Exporting Countries (OPEC), but the oil industry has all but collapsed in the South American state. To put it in laymen’s terms, production is down and the cost has gone up.

A weak rand value to the dollar
It’s been a nightmare month for the rand, which has had to battle against the fierce knockout blow delivered by the recession. With the financial crisis coming as something of a surprise, the rand plummeted against the greenback and has struggled to find its feet ever since.

It soared above the R15 mark, and only recently came back down to R14.40. Most recently, Turkey’s currency tanked as a result of Trump’s intense import tariffs, aimed at stimulating industrial growth within the US.

In a global market, for every action, there is a reaction, and all emerging economies felt the knock-on effect of Turkey’s wobble.

Government subsidy backfires
Have you ever tried to help a situation but only gone and made things worse? Well, that’s effectively what happened to Jeff Radebe last month. The minister announced that the government would subsidise fuel costs for the month of September, meaning that an increase in the petrol price was smaller than forecast.

However, what were we just saying about actions and reactions? The slight relief felt this month will be compounded by the misery said to be coming our way next week.

For petrol prices to rise by a rand within a 30-day period is sharp, shocking rise. Had there been no government intervention, there’d be less of a knock-on effect. October’s rise could have been as “little” as 50 cents per litre, had South Africans been allowed to pay the full whack in September.

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.

By Kaunda Selisho for The Citizen 

The nation will have to pull those belts a whole lot tighter with a projected increase of about R1.14 a litre of petrol.

There seems to be no end in sight for South Africa’s perpetual rise in fuel prices as the Central Energy Fund (CEF) has predicted yet another increase for the month of October.

The CEF report, released earlier this week, attributes the projected increase to a weaker rand and a higher international oil price.

The most recent hike was capped at 5c after government intervention but was dubbed a “once off” to provide citizens a short reprieve after sustained increases over five months in the lead-up to September.

According to the CEF’s calculations, early indicators estimate that the fuel price could rise by R1.14 a litre in October.

Fin24 calculated that the inland price of 95 octane petrol would rise to a possible record high of above R17 a litre, thus affecting food prices and transport costs.

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.

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