The great fuel rip-off

As petrol and diesel prices in South Africa hit record highs from midnight tonight, our neighbours in southern Africa pay up to 30% less per litre than we do – although the fuel all comes through this country.

Consumer goods will also go up as most are delivered to retailers by road.

The fuel price increase, which kicks in at midnight tonight, will hit motorists’ pockets hard, with a 60 litre tank due to cost nearly R50 more to fill. But while South Africans pay through the nose for fuel, neighbouring countries pay much less, for fuel they import from here.

Although South Africa serves as a fuel bank and exporter of fuel to its neighbours, it has one of the highest fuel prices in the region, with only Zimbabweans paying more per litre.

The price fuel will increase by a massive 82 cents per litre tonight, making this divide even worse, and driving petrol prices up in much of inland South Africa to around R15.54 and R15.79 for 93 and 95 octane petrol respectively. Diesel will increase by between 85 and 87 cents a litre, depending on the grade.

In contrast, in Namibia a litre of petrol currently costs only R11.69. In Botswana, it’s R10.53, R11.67 in Lesotho and in Swaziland R12.78.

The current price increase is the result of a weaker rand and an increase in crude oil prices. An under-recovery during the previous fuel price increase also had to be taken into account.

Automobile Association of SA spokesperson Layton Beard explained that a significant part of the R15.54 included the government’s fuel taxes. The taxes, which officially increased in April, include R3.37 for the General Fuel Levy and R1.93 for the Road Accident Fund (RAF). Beard said the government got about R60 billion from the General Fuel Levy and R25 billion from the RAF a year.

But, despite the glaring difference in fuel prices across the region, at least one expert believes South Africans are still getting good value for money, and that South Africa has one of the “better” fuel systems in the world.

Head of Gumtree Automotive South Africa Jeff Osborne said that when comparing countries, one must consider the value of the country’s currency and its government taxes. He said that although the increase in the petrol price in SA was a result of the country’s current economic state and the increasing cost in crude oil internationally, South African fuel prices were reasonable in comparison to other countries, especially in Europe.

“We have one of the better systems because our system is transparent. The prices can go up and down depending on the state of our economy. We are also one of the only countries in the world that has a full service, where someone will serve you, which brings about a sense of security.”

He said the increase was quite substantial though, and would have an impact on the consumer.

“It will have a direct impact on transport and an increase in taxi fares is inevitable.

“Prices of consumer goods will also be affected as most of them are delivered to their relevant markets by road,” said Osborne. –