The year 2022 will be remembered for drastic hikes in the price of petrol and diesel, and an energy crisis.
Although there was some relief for South African consumers over the past two months, fuel price increases were announced again this month.
At midnight, petrol (both 93 and 95) increased with 28c per litre, diesel with 9c per litre and paraffin with 58c per litre.
With each price hike, there are calls for the restructuring of fuel prices.
It could make a difference, but the price is actually determined by the international crude oil price, the value of the rand and taxes.
The formula is transparent and can be calculated fairly easily by anyone who would take the time.
One characteristic of the price is that it is always calculated retroactively. It basically means that this month, one pays what fuel cost the previous month.
Thus, a possible over or under recovery is also considered.
The only factors within government's control are the taxes and, to a lesser degree, the value of the rand.
With taxes there is very little leeway seeing as lost revenue must then be collected elsewhere.
The rand's value, on the other hand, is being undermined by the current power crisis and the reckless statements about the South African Reserve Bank's mandate. This institution is, after all, tasked with protecting the currency.
Ultimately, the strongest action one can take to bring the rising fuel prices back under control is voting out the ANC government. So, make use of that opportunity in 2024.
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