By Ashley Lechman for IOL
There seems to be no reprieve for South African wallets as another hefty fuel increase is predicted for next week, as well as economists anticipating further interest rate hikes.
The Organisation Undoing Tax Abuse (Outa) said on Monday it predicts that motorists could be paying R1.75 more for fuel from July 6.
Citizens could soon be sounding the alarm bells, as the South African Reserve Bank, will also be looking to curb the spiking inflation in the country by raising interest rates once again at its next Monetary Policy Committee meeting.
The Reserve Bank has been on a trend of raising the interest rate since the start of the year, as the country recovers from the Covid-19 pandemic.
Adding to the pain felt to the wallets of many, the continuing crisis in Ukraine affects wheat and cooking oil prices, driving up the price of many food items.
In an effort to provide some form of relief, Outa has urged the government to extend the R1.50 general fuel levy.
“We really do need to see longer-term solutions, but for now, the short-term solution is the only space government can provide some reprieve, and that is in the fuel levy,” Outa CEO Wayne Duvenage said.
“Outa believes it would be prudent for the minister of finance to consider extending the fuel levy reprieve of R1.50 per litre.”
Minister of Finance Enoch Godongwana extended the general fuel levy relief on May 31 this year, saying it would be R1.50 until July 6, then drop to R0.75 until August 2.
“Petrol is extremely expensive now. It is impacting on inflation. It is impacting on commuter pricing. So instead of dropping it to R0.75 for another month, keep that R1.50 reprieve in place,” Duvenage added.
Source: Supermarket & Retailer
Checkers has calculated that the average Sixty60 customer saves 33% on fuel and vehicle running costs by shopping via the app and paying the R35 delivery fee.
In calculating this saving, Checkers considered that South Africa’s top-selling passenger vehicles cost R7.01 per kilometre to run. By comparison, the average return journey for a Sixty60 delivery is 7.5km.
“If a customer made this trip, it would cost them R52.57. Compared to Sixty60’s R35 delivery fee, this realises a saving of R17.57 per trip,” it said.
This calculation has been independently confirmed by the Automobile Association (AA) of South Africa, a non-profit organisation that tackles motoring issues of national and macro-economic importance on motorists’ behalf.
Checkers Sixty60 one-hour on-demand grocery delivery service launched in late 2019, just prior to the onset of the Covid-19 pandemic in early 2020.
In December 2021, the Shoprite Group said it had entered into a joint venture with its existing Checkers Sixty60 logistics partner, the RTT Group, in which both parties will own 50%.
“We anticipate this transaction will add to the more than 4,000 jobs already created by Sixty60 as we continue to grow in the communities in which we operate,” said Shoprite Group chief executive Pieter Engelbrecht.
“We consider the combined capability we have built with RTT to be a critical competitive advantage and key to Sixty60’s rapid growth. This RTT On-Demand joint venture will allow the group the opportunity to continue enhancing our order fulfilment and last-mile delivery capabilities whilst giving us the opportunity to grow our precision retailing efforts for our customers,” Engelbrecht said.
Checkers, inclusive of Checkers Hyper, operates from 268 stores in South Africa, while Checkers Sixty60 has rapidly expanded to over 261 stores and has created over 4 100 new jobs – up from 800 at the end of 2020.
Shoprite is the largest private employer in South Africa, employing over 142,600 people, 30,000 of which work within the Checkers brand.
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.
Source: Supermarket & Retailer
Following a tumultuous first trading week of 2022, global equity and bond markets were calmer last week. There was more action in commodities, with the one-month Brent crude oil future ending the week more than 5% higher, the group said in a research note on Monday (17 January).
“A combination of oil demand holding up despite the Omicron-driven surge in Covidinfections (especially in the US) and supply disruptions boosted the oil price,” it said.
“After some reprieve on the domestic fuel price front in January, the renewed rise in the oil price is likely to result in another hefty fuel price increase in February.”
There will also be a significant focus on inflation data this week ahead of the South African Reserve Bank’s interest rate decision on 27 January, the BER said.
“We expect the headline CPI to increase by 5.8% y-o-y (consensus is at 5.7%), up from 5.5% in November. This is courtesy of a projected 0.4% m-o-m rise, driven by the more than 70c/litre rise in both the petrol and diesel price at the start of that month, as well as the quarterly survey of rental costs.
“As a result of the seasonal rise in meat prices, the food category should also add to the overall monthly CPI increase.”
South Africa is likely to see at least three interest rate hikes in 2022 as the South African Reserve Bank (SARB) has indicated that it will begin unwinding its accommodative monetary policy stance, say economists at Momentum Investments.
In a research note on 4 January, the group said that the SARB’s quarterly projection model calculates a steep interest rate hiking cycle – resulting in interest rates of 5.75% by the end of 2023 and 6.75% by the end of 2024.
“In our view, well-behaved inflation, anchored inflation expectations, and a pedestrian growth outlook advocate a more moderate interest rate hiking cycle,” Momentum said.
“We expect the SARB to hike interest rates thrice by a cumulative 75 basis points in 2022 and a further three times by another 75 basis points in 2023.”
The National Energy Regulator of South Africa (Nersa) is also expected to table its 2022/23 price determination in parliament at the end of February or the beginning of March.
Eskom chief financial officer Calib Cassim has confirmed that the state-owned power utility has applied for an electricity price increase of 20.5% for its 2023 financial year, set to take effect from 1 April 2022.
On 5 March 2021, Nersa approved a hike of 15.06% for Eskom’s direct customers, which was subsequently implemented on 1 April 2021. A hike of 17.80% for municipalities was implemented on 1 July 2021.
Cape Town mayor Geordin Hill-Lewis has warned that similar increases would simply be unaffordable for most South Africans this year.
“Like the majority of South Africans, many Capetonians are struggling to make ends meet. The pandemic and national lockdown led to the closure of hundreds of businesses in our City and the loss of thousands of jobs. Our residents are faltering under the burden of the rising costs of energy, fuel, food, and basic consumer goods.
“The consumer price index (CPI) is currently stated as 5,5%; this would have been a more reasonable tariff increase for Eskom. The price of electricity has risen by 307% over the past 13 years, far exceeding inflation. Despite paying more for power, South Africans have experienced an unreliable electricity supply — 2020 and 2021 were two of the worst load shedding years on record.”
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: The South African
The mid-month petrol price estimates for July were published on Tuesday, and they are the very definition of a mixed bag. Although some grades of fuel are seeing costs drop steadily, others are heading in the wrong direction.
Petrol prices are set for a decrease. Granted, that will only be by a few cents – as it was last month – but any movement in the right direction should be welcomed. According to the Central Energy Fund (CEF), six cents per-litre will be trimmed from the 95 grade of petrol, and 93 grade is getting three cents cheaper. Every little helps, right?
– Petrol 95 is expected to cost an average of R17.07p/l inland, and R16.41p/l by the coast.
– Petrol 93 is expected to cost an average of 16.88p/l inland, and R16.36p/l by the coast.
Both diesel and illuminating paraffin are likely to be more expensive in July, though. In total, costs for the fuel are predicted to rise by 19 cents. Meanwhile, there is a 14 cent increase on the cards for the aforementioned oil:
– Diesel (wholesale) is expected to cost an average of R14.85 – R14.90p/l inland, and R14.24p/l by the coast
– Illuminating paraffin (wholesale) is expected to cost an average of R8.91 across the country.
Things could have been much better for South Africa: After posting some very positive GDP data and seeing the Rand perform strongly against the US Dollar, there was a quiet confidence in some circles that the petrol price would take a significant tumble in July. But a mix of load shedding and COVID-19 infections effectively put paid to that.
Rolling blackouts have crippled a pandemic-weary country for the best part of two weeks, inhibiting businesses from performing at their peak at a time where every cent counts. According to the CEF, this has taken a substantial toll on the forecast fuel costs for the month ahead – and it’s another thing fine mess we can pin on Eskom.
By Tom Head for The South African
For the third month in a row, the petrol price has decreased in South Africa. March will see the following substantial changes to fuel costs.
A substantial drop for both the diesel and petrol price in South Africa has put our motorists in a good mood at the start of March.
Confirmed petrol price for March 2020
Petrol getting cheaper, but so is diesel and illuminating paraffin:
- Petrol: Decrease of 19 cents per litre
- Diesel: Decrease of 54 cents per litre
- Paraffin:Decrease of 68 cents per litre
Subtracting these totals from February’s fuel price gives us the following average cost-per-litre for petrol and diesel. These prices will take effect from Wednesday 4 March:
- Inland petrol price – R15.84
- Coastal petrol price – R15.07
- Inland diesel price – R13.49
- Coastal diesel price – R14.03
Why is the petrol price dropping in March?
There are, as ever, two major factors at play. However, it’s the global oil price trends that have accounted for this slashing of fuel costs. The outbreak of the coronavirus has left international markets spooked, and the demand for oil has subsided. The decrease would have been more, if not for the Rand’s weak monthly performance against the US dollar. Despite a brief rally this week, ZAR is still floundering.
The honeymoon period is unlikely to last through to April, however. It was announced during February’s budget speech that taxes on fuel would be rising, making petrol prices more expensive.
South African consumers will experience their first price drop at the pumps in six months as the price of fuel decreases by nearly a rand today.
Petrol 95 will fall by 95 cents a litre and 93 octane by 96 cents, while diesel (0.05% sulphur) will decrease by 74 cents and diesel (0.005% sulphur) by 75 c/l.
However, analysts are pointing out that consumers will have little to celebrate as electricity tariffs hikes kicked in on 1 July.
Despite the fact that the average car will cos R30 to R40 less to fill, consumers are unlikely to achieve much relief.
- Bus and taxi fares are unlikely to go down
- Electricity tariffs are increasing
- The petrol price decrease only accounts for about R2.50 for every R1 000 people have
Retreating oil prices have painted a rosier picture for South African fuel users than has been the case for much of 2019. This is according to the unaudited mid-month fuel price data released by the Central Energy Fund.
At this stage of the month, we are predicting a decrease of 91 cents/litre to the petrol to the petrol price, 70 cents to the diesel price, and 62 cents to illuminating paraffin.
The story of the month is definitely oil. Crude laboured above $70 a barrel for large portions of April and May, as the tug-of-war continued between the OPEC countries, which favour ongoing output restrictions, and the USA, where production is steaming ahead. There had been a remarkable drop in the price of oil since the end of May, with the commodity currently trading around $61 dollars a barrel.
South Africans are not getting full value though, thanks to Rand jitters in the wake of the ANC top leadership trading jibes over the future of the Reserve Bank. After a period of sustained price stability, the Rand weakened substantially against the US dollar, taking some of the shine off oil’s retreat.
The expected price drops are nonetheless substantial, with petrol showing a 91 cent-a-litre drop at month end, with reductions of 70 cents and 62 cents respectively for diesel and illuminating paraffin.
If stability returns to the Rand and oil settles at its lower level, there might yet be more good news in the pipeline. A lot will rely on politicians exercising restraint in their public statements. We urge government to decide on its economic policy clearly and unambiguously in private, before articulating it in public where investors are watching.
By TJ Strydom for Business Live
Motorists will this week get their steepest increase at the pump in four years as the recent slide in the rand and higher global
oil prices are passed on and a hike in government levies takes effect.
The retail price for 95 octane petrol is set to rise R1.31 per litre inland on Wednesday and R1.26 on the coast, the Central Energy Fund (CEF) said on Saturday. Diesel prices will rise about 82c.
The increases will pile pressure on consumers who are reeling from a value-added tax increase in 2018 and face
another bout of electricity price hikes. Prices rise 14% for direct Eskom customers on Monday and for a similar amount for municipal customers on July 1.
Fuel price hikes usually have a second-round effect as wholesalers, retailers and other service providers gradually pass the increases on to their customers. And the hikes are notoriously “sticky” when it comes to inflation — taxi fares that rise when fuel becomes more expensive do not necessarily fall when prices at the pump
Petrol at R16.13 per litre is still cheaper than it was as recently as December, but the increase is the harshest since April 2015, according to data from the Automobile Association.
With weak economic growth and the turmoil at the SA Revenue Service contributing to an expected revenue shortfall of more than R42bn and personal and company taxes at their
limit, the Treasury has shifted increasingly to other avenues for taxation. Government-imposed levy adjustments account for 20c per litre of this week’s increases, with 15c going to the fuel levy and 5c to the Road Accident Fund. These increases were announced by finance minister Tito Mboweni in his budget in February. Roughly a third of the amount motorists are charged go to these coffers.
“With effect from 3 April 2019, the fuel levy in the price structure of petrol and diesel will amount to 352c per litre and 337c per litre respectively. The Road Accident Fund levy in the price structure of both petrol and diesel will amount to 198c per litre with effect from 03 April 2019,” the CEF said.
The fund said the weaker rand, which on average depreciated from R13.80 in the previous month to R14.39 in the latest month, and higher global oil prices were responsible for the rest of the hike. When the Bank announced its interest rate decision last week, the size of the increase was already easy to forecast using CEF data.
Though consumer price inflation is comfortably within the Bank’s target, it flagged global oil prices and the effect it will have on domestic fuel costs as one of the upside risks to its inflation outlook when it left the repo rate unchanged at 6.75%.
Fuel prices, along with higher food and electricity costs, were expected to lift inflation over the medium term, Bank governor Lesetja Kganyago said.