The AA warned that economic shocks which weaken the exchange rate could worsen the picture by month-end and be the cause of Rising Fuel Prices. With the cold of winter having set in, people who use paraffin for heating and cooking are poised to experience a sharp jump in their energy costs, along with a rise in transport-related costs.
How are fuel costs calculated?
In South Africa this price is adjusted monthly based on a number of factors, mainly international petroleum prices, and the Rand/US Dollar exchange rate.
The Basic Fuel Price (BFP) is calculated based on costs associated with shipping petroleum products to South Africa from the Mediterranean area, Arab Gulf, and Singapore, reports the AA. These costs include insurance, storage, and wharfage, the cost to use harbour facilities when off-loading petroleum products into storage facilities.
Other costs affecting the SA rising fuel prices include:
• Transport costs (from the harbour to other areas)
• Customs and excise duties
• Retail margins paid to fuel station owners
• Secondary storage costs
• Fuel Levy
• Road Accident Fund (RAF)
The Fuel Levy goes directly to the National Treasury, while the RAF Levy goes to the RAF, and is used to care for victims of car crashes.
This means that for every litre of petrol costing R11.46, R4.09 (or almost 35%) is allocated to different government levies.
According to the Automobile Association (AA) which was commenting on unaudited month-end fuel price data provided by the Central Energy Fund (CEF). The AA noted that in mid-June, petrol was set for a rise of up to 30 cents a litre, and diesel as much as 63 cents, however, the picture has improved slightly over the past two weeks.
What we suggest doing to save on fuel costs?
It advised South African motorists reconsider their driving patterns and car sharing habits to economise, should the current run of fuel price hikes continue in the medium term.
Join CarTrip and sign up as a driver, for free, and offer rides to work, on a holiday up the coast or even a once off shopping trip at your nearest mall. This will save you a lot of money lost on fuel. Find out more about how much you can make back here.