55c Hike on Fuel ???!!!!!

[Wick-ed]

Government is pushing fuel to another record breaking 55c/liter next month.

 

[Coisman]

imp:
I didn't hear anythin??? :dunno:

 

[whattingh]

As a result of the rand's disastrous September against the US dollar, which has seen it shed more than 15% from around 7.00 to around 8.20, under recovery in the fuel price mix will see petrol and diesel rise sharply on October 5.

According to economic think-tank Econometrix, petrol is likely to rise by 36c a litre on October 5, while diesel is expected to rise by 38c a litre. In Gauteng, petrol is likely to go up to R10.36 a litre, just shy of its all-time high price of R10.50 a litre.

The current price fixing period began on September 2 and ends on Thursday 29. By yesterday, the average under recovery for the period was 28c a litre on petrol, but yesterday's under recovery was 55c a litre. A week ago the under recovery was around 23c a litre, but this was when the rand was at 7.30 to the dollar.

"If oil stays at around current levels of $110 a barrel and the rand does not recover, we are likely to see another big rise in fuel prices in November," said Econometrix's Tony Twine.

At the current levels of the oil price and the rand, petrol and diesel would both rise by more than 20c in November. This would see petrol at around R10.60 a litre.

However, Twine believes that the rand could stabilise or strengthen a bit after its sudden and precipitous fall, which was exacerbated by importers making final orders for the upcoming Christmas period.

Adding further grist to the inflationary mill, said Twine, is the fact that fuel retailers were still awaiting approval of a margin increase from the National Energy Regulator of South Africa (Nersa) which would add a further dimension to rising fuel prices.

"The Fuel Retailers Association has been looking for a margin increase of around 15c a litre. This increase did not occur in August or September, so it still has to be implemented once it has been approved by Nersa," said Twine.

If a 15c a litre margin increase is granted, petrol and diesel could both be close to R11.00 a litre before the end of the year, unless a lower oil price and a stronger rand come to the rescue.

Earlier this year, Twine delivered a presentation that outlined how pervasive crude oil's impact is throughout the South African economy.

Apart from increasing travel costs for motorists and the movement of goods and services around the country, high oil prices negatively affect the input costs of a wide range of goods with prices rises ultimately filtering through to consumers.

 

[Coisman]

imp:
So where did you get that article, and when was it dated??

 

[whattingh]

imp:
So where did you get that article, and when was it dated??

22 SEPTEMBER, 2011 14:04

http://www.businesslive.co.za/south...-prices-heading-for-record-highs-on-rand-woes

 

[Coisman]

imp:
Thanks man. :thumb:

 

[akash]

Hi Coisman

Its true heard it on E-News last night. The increase will happen next month.

 

[Coisman]

imp:
It's still cool, cause it will still be cheaper that alcohol. :=):

 

[tcal69]

oh geez rand is weak... blah blah blah... when the rand was strong the petrol was still expensive and increasing, did nobody notice that?

 

[zabbo]

@Wick-ed ... so you gonna arrange some discounts then?

 

[moranor@axis]

oh geez rand is weak... blah blah blah... when the rand was strong the petrol was still expensive and increasing, did nobody notice that?

yip they very quick to up the price but not so quick to put it down...

 

[whattingh]

oh geez rand is weak... blah blah blah... when the rand was strong the petrol was still expensive and increasing, did nobody notice that?

DOnt get me wrong I do agree with you to some degree, but there is a few factor that must all be looked at. ZAR/USD and oil price and what ever new tax they add on. I hav made calculations and the oil price have a much bigger affect on the petrol price.

GIve that when oil go up or zar weakens price go up big, when oil go down or zar strengthen price barely come down.

Given that the oil price ave is on a down slope I did not expect the petrol price to go up.
http://www.oilnergy.com/1obrent.htm


http://www.indexmundi.com/commoditi...est-texas-intermediate&months=60&currency=zar

 

[saturnz]

Oil price is well over $100 and will probably stay that way for quite some time.

last year it averaged around $70 and about 10 years ago it was around $30

 

[Bayn46]

The Rand/Dollar price spiked for like a week so they just take the value where it spiked near the top and calculate based on that?? The rate has dropped like 50c in the last day or two and is currently sitting at R7.82 a Dollar.

 

[saturnz]

you looking at things in the wrong context

The rand may have dropped 50c, but a month ago it was well under R7.

And if you go back a year the oil price was around $70 and is now over $100.

In my view the rise in petrol price seems consistent with the current situation. You might not be happy about it but show me a country where people are not complaining about the price of fuel.

 

[moranor@axis]

im not saying the fuel price should not be going up in general, but it always seems to go up by alot and when it comes down it does not come down by much...

i feel that we are being slightly ripped off...

 

[Coisman]

imp:
It's always before/during holidays that it goes up.

 

[saturnz]

Like I said, just about everybody in every country share the same sentiments expressed here, everybody feels ripped off.

I'm currently listening to an album by a UK band named, Bloc Party, and they wrote a song about the rise in fuel price.

Also Whattingh, the oil price has been on a down slope since the end of the first quarter, but its not fallen by much, and compared to last year it is still significantly higher than those levels.

 

[Bayn46]

Yea, obviously we aren't the only country that gets hit with petrol price increases but I just find their random justification weird.

Just because the Rand/Dollar has a hiccup doesn't mean that panic should ensue and prices should start going ass crazy. If you look at it over a period of a few months then yes, the rand did get progressively weaker and a petrol price hike may be justified, but as I said, it feels like they try and justify it in weird ways.

 

[saturnz]

Well if you feel you are being ripped off or that their explanations are not consistent with the price adjustments, you can try to take it up with the relevant authorities, especially with the new consumer protection act.

Also it would be interesting to hear the views of the AA or NAAMSA on price adjustments, if they are raising objections then I suppose something would be fishy, but they haven't so it leads me to believe the price adjustments are transparent.

If they get their explanations wrong, thats unfortunate, but explanations of the current economic crisis has been wrong on a global level for the past two years, so the someone getting it wrong in a small country like ours is not a major train smash.