Attorney Michael de Broglio on: South Africa, Law, Politics, Attorneys, Sport, Photography, Technology, Gadgets, Media, Crime, Road Accidents Fund,
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Whenever the petrol price goes up we talk about the effect of the Rand. The Rand has certainly collapsed, as have the currencies of most emerging economies in the last year. Most people for example would not know that even a strong country, like Canada, has seen its Dollar drop 20% against the US Dollar in the last year. The effect on the petrol price though is not as dramatic as we always think it is.
Sure, petrol would be a lot cheaper right now if it were not for the rand collapsing, because it is at record lows all around the world. However, the actual fuel cost is approximately 45% of the total price we pay at the moment and the rest is largely taxes. The current landed cost of the fuel, and bear in mind that this changes every day, is approximately R5,50 per litre and we get the whole way to the R12,09 that 93 unleaded is currently retailing for (and there is no reason to use 95) via taxes. The Road Accident Fund levy is at least a worthwhile one, but pales into insignificance compared to the general revenues, taxes and profits that the Government has put onto petrol. Before we are all up in arms, in countries like the UK, the government has added on far more taxes so that 1 litre of petrol currently costs £1,09 – which translates into approximately R25,60 a litre. So, in that respect, South Africa is very cheap.
At the moment, and obviously the figure will change from day to day, we are looking at an 8c increase on the petrol price at the beginning of February and if it were not for the Rand, we would in fact be getting a 45c decrease. One could speculate that petrol would probably be about R3,00 a litre cheaper if it were not for the weakness of the rand, but the real culprit in the price of petrol is not the rand, it is general Government taxes.
Posted by Michael de Broglio on Monday 25-Jan-16
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Comments
Joyce said:
on Tuesday 09-Feb-16 04:01 PM
at least there is still something cheap in South Africa even though petrol price changes from day to day
Sarah said:
on Tuesday 02-Feb-16 04:27 PM
We need a new government. The rand is decreasing all the time and that influence at of things. If the rand doesn't get stronger petrol will keep going up and so will food prices as well. With the drought we having already food is going up in April 2016.
Lourien said:
on Tuesday 02-Feb-16 02:39 PM
The Petrol price will be going up again on Wednesday... With all the price increases such as food going up because of the drought we actually need the petrol price to go down. The government taxes are also not helping at all.
Alexis said:
on Monday 01-Feb-16 08:56 AM
The joys of how we have to suffer because of our government. It seems like all we are ever doing is paying more
said:
on Friday 29-Jan-16 04:48 PM
at least there is still something cheap in south Africa even though petrol price changes from day to day
Angelique P said:
on Thursday 28-Jan-16 03:18 PM
I don't understand why we must pay taxes if it's to no use.
The government use it on things that is unnecessarily and that has no benefit to South Africa.
lucretia said:
on Wednesday 27-Jan-16 01:20 PM
Well Nkandla, 6 wives and 20 children are expensive. Taxes have to sky-rocket because we the tax payer pays for all of that.
Zanell said:
on Wednesday 27-Jan-16 12:11 PM
Feel sorry for those people going on holiday.. makes it so much harder to enjoy your holiday..
Natasha said:
on Wednesday 27-Jan-16 10:34 AM
Its scary to think if its like this now how is it going to be over 8 years.At this moment everything is expensive petrol food everything. SCARY how everything gets effected by the rand
Prishani said:
on Wednesday 27-Jan-16 10:26 AM
Petrol prices have an influence on everything, most importantly the price of food, people complain about the weakness of the Rand all the time! It is very interesting to note that the petrol price is mostly effected by government taxes and most people are silent on that, maybe because many SA citizens are not aware of it!
Jessica said:
on Wednesday 27-Jan-16 10:16 AM
Ya and then the Government pleads poverty and states that the RAF is broke to people. No they just must stop using the money on themselves and actually use it on what the tax is being taxed for!!! But we know this will not happen so we will still suffer. P.S it is extremely worrying how weak our Rand is now and with the drought and food prices apparently going up 40% by April. Good luck to us all.
Safia said:
on Monday 25-Jan-16 04:27 PM
Weak rand will effect travel overseas so people will have to travel around the country, all imported goods will be more expensive so
we will have to buy locally produced and hopefully that will be good for SA economy.
as long as the government does not increase taxes!
Angelique said:
on Monday 25-Jan-16 02:26 PM
This is always topic of discussion everyday. Despite the comparison you have made, I still feel that we will never be satisfied with the price of petrol. At the end of the day overseas they see the good being done with their tax. I refuse to see what comes out of our high tax that goes to our government - It goes to Nkandla. The only thing I can see that it helps is basically the RAF but even then funds are being misused etc. With the amount we pay in tax we should have a well run country with not as much poverty as we have. We will always feel poor because prices increase on the daily.
Juliet said:
on Monday 25-Jan-16 12:10 PM
The petrol discussion is such an ever-present sword in our South African sides....sigh....
As mentioned below, there is a food price crisis looming too.... so much to look forward to!
Thabitha said:
on Monday 25-Jan-16 08:43 AM
We will end up paying more for transport because of the Government taxes
Jessica Apfel said:
on Monday 25-Jan-16 08:16 AM
Government taxes are exactly that TAXING - Oil seems to be a cheaper commodity though nowadays, yet an increase remains ever so prevalent?
Melissa P said:
on Monday 25-Jan-16 08:01 AM
The weak rand affects us all one way or another. Food prices are going up too. Interesting fact on petrol prices in UK. Enjoyed the read.
Johannesburg based attorney specializing in personal injury matters including Road Accident Fund claims and medical negligence matters. My interests include golf, reading and the internet and the way it is constantly developing. I have a passion for life and a desire for less stress!
