Petrol Price at the highest its ever been after yet another increase

THE PETROL price increased again, by one cent per litre on Wednesday, August 1.

Early in July, President Cyril Ramaphosa said that government would find ways to offer South Africans relief from the crippling effects of the high petrol price and the VAT increase.

Professor Jannie Rossouw, the head of the School of Economic & Business Sciences, told Wits Vuvuzela that finding a solution would not be an easy task.
“It will be difficult to find a solution. If they reduce the tax on petrol, then they would have to find something else to increase tax on,” Roussouw said.

“On the other hand, they could reduce government spending but that is not an option. That would affect things like healthcare and grants and that is not an option,” he added.

South Africa has had five petrol price hikes this year alone. Rossouw explained to Wits Vuvuzela why this happened.

“The government is in need of revenue and petrol becomes an easy commodity to tax in order to get revenue,” Rossouw said.

Last month 93 and 95 grades of petrol increased by 26c per litre and 23c per litre respectively.

The recent increase has pushed the two grades of petrol to R15,8and R16,03 per litre, respectively.
The fuel price is comprised of the general fuel levy, the Road Accident Fund (RAF) levy, the basic fuel price and distribution and transport costs.

“We [South Africa] have taxes on our fuel. We have the RAF levy which is R1,93 and the general fuel levy at R3,37. This comes to a total of R5,30,” said the Automobile Association (AA). The general fuel levy is a tax charged on every litre of petrol sold.

In April 2016, the general fuel levy increased from R2,55 to R2,85. Last year, this levy again increased by 30c. This year it has increased by 22c and now stands at R3,37 a litre.
AA spokesperson, Layton Beard, said that South Africa’s petrol prices are higher than those of neighbouring countries.

Beard added that if the RAF and general fuel levy tax totalling R5,30 is removed, South African’s would pay around R10 for petrol.
“South Africa pays about R5 more than countries like Botswana and Lesotho because they don’t put that much taxes on their fuel.”

“The South African government has actually chosen to impose this levy. Other countries have their own government and treasury and if they choose to add a levy they can but it has nothing to do with us,” he said.

According to the AA the price of fuel is adjusted monthly based on a number of factors, mainly international petroleum prices, and the Rand/US Dollar exchange rate.

“During July, the recent weakening trend of the Rand against the US dollar slowed, noting that the local currency lost some ground, but only marginally,” read the statement.
“Over the same period, international oil prices showed a slight average decrease which almost exactly cancelled the Rand’s losses.” As a result, the petrol price increased slightly in August.

The fuel price increase does not only affect motorists. A Wits student spoke to Wits Vuvuzela about the effects the increases have had on her.

First-year Bachelor of Pharmacy student, Confidence Monyetswale, said she did not understand why the increases happened but felt the effects.
“I know of one increase and that is the one that happened last month. I travel from Joburg to Tembisa. It used to cost me R15, now it costs me R17,” she continued.

The 19-year-old added, “I don’t think there is anything we can do about it. We just have to adjust.”

FEATURED IMAGE:   PETROL: The current petrol price is at the highest it has ever been at more than R16 per litre.                                                                Photo: Palesa Dlamini

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