The petrol price in South Africa reached a record high at the beginning of July 2018, with 95 Octane now costing R16.02 inland and R15.43 in coastal regions. Petrol rose to 82 cents a litre for both 93 and 95 octane fuel and the diesel price increased between 85 and 87 cents per litre, with illuminating paraffin shooting up by 82 cents. It’s hard to believe that in July 2017, just one year ago, 95 Octane cost R12.86 per litre inland.
One of the contributing factors to the fuel increase is the depreciation of the rand to the US dollar because the Crude oil used in petrol is purchased using US dollar. From 25 April to 31 May 2018 the exchange rate was R12,50/1$ compared to R11,97 the previous month. According to the Department of Energy, this led to a higher contribution to the Basic Fuel Prices on the various fuel types that are used in South Africa.
Unfortunately, if market conditions continue on the current path, vehicle owners need to anticipate more petrol price increases.
Fuel is not the only price hike that South Africans are worried about. In April 2018, the Pietermaritzburg Agency for Community Social Action published its Food Barometer, which showed the impact of the 15% VAT hike on food prices. According to the organisation, the increase led to a 6,5% jump in the VAT paid on the group’s nutritional basket, which consists of food items that an adult would need for a nutritionally complete diet.
Many people simply cannot afford these price increases and are not finding relief anywhere. When the price of petrol increases, the price of food and the general cost of living, increases too.
To lessen the burden of increasing price hikes, invest in a rent-to-own car finance plan, where, Instead of accumulating more debt, you have a small, reliable and fuel efficient vehicle from Earn-a-Car.