Bumpy ride for South African motorists
PETROL PRICE HIKE Motorists could pay about R20/ℓ for petrol this year
Photo by Duane Daws
The expected rise in Brent crude oil prices and geopolitical decisions by South Africa will influence the petrol price and vehicle prices in 2016, says the Automobile Association (AA) of South Africa.
According to audit, advisory and tax services firm KPMG automotive sector partner Gavin Maile, a rise in the fuel price will cause local automotive vehicle producers to hike prices, as transporting the components will become more expensive.
However, he states that even if the fuel price increases, manufacturers will benefit from the weak exchange rate when they export locally manufactured models.
“We release a speculative monthly fuel price twice a month, where we measure the hypothetical fuel price by taking the current price of Brent crude oil and the exchange rate into account. We also receive the under and over recovery information from the Central Energy Fund (CEF) and, with these three components, we are able to predict what will happen to the fuel price in the following month,” AA spokesperson Layton Beard tells Engineering News.
This is despite a relatively stable fuel price over the festive period, owing to lower prices of Brent crude oil, which, in December, was reported to have dropped to $30/bl.
He points out that unaudited data from the CEF released in mid-January show that, had the exchange rate remained flat in 2015, motorists could have enjoyed a saving in the region of 45c/ℓ at the pumps in 2016. However, should oil prices return to highs such as those witnessed in 2013 and 2014, motorists could pay about R20/ℓ for petrol this year.
“Geopolitical activity can also dictate how the fuel price fluctuates, as we saw in December, when replacing Minister Nhlanhla Nene as the Minister of Finance had an immediate effect on the exchange rate,” says Beard.
Also, adding to motorists’ pain, he indicates that, should the proposed amendment to the Administrative Adjudication of Road Traffic Offences Act be implemented, authorities can go as far as to deny e-toll defaulters their vehicle licence.
“This makes the situation all the more cumbersome, as only 10% of users are paying their e-toll accounts. This would lead to thousands of people not renewing their licences,” Beard concludes.
Comments
Press Office
Announcements
What's On
Subscribe to improve your user experience...
Option 1 (equivalent of R125 a month):
Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format
Option 2 (equivalent of R375 a month):
All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors
including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.
Already a subscriber?
Forgotten your password?
Receive weekly copy of Creamer Media's Engineering News & Mining Weekly magazine (print copy for those in South Africa and e-magazine for those outside of South Africa)
➕
Recieve daily email newsletters
➕
Access to full search results
➕
Access archive of magazine back copies
➕
Access to Projects in Progress
➕
Access to ONE Research Report of your choice in PDF format
RESEARCH CHANNEL AFRICA
R4500 (equivalent of R375 a month)
SUBSCRIBEAll benefits from Option 1
➕
Access to Creamer Media's Research Channel Africa for ALL Research Reports on various industrial and mining sectors, in PDF format, including on:
Electricity
➕
Water
➕
Energy Transition
➕
Hydrogen
➕
Roads, Rail and Ports
➕
Coal
➕
Gold
➕
Platinum
➕
Battery Metals
➕
etc.
Receive all benefits from Option 1 or Option 2 delivered to numerous people at your company
➕
Multiple User names and Passwords for simultaneous log-ins
➕
Intranet integration access to all in your organisation