Fin24

SA's hands tied on petrol price

2012-07-18 22:10

Cape Town - There is very little that South Africans can do about reported oil price rigging and the possible effect it could have on motorists, an expert told Fin24 on Wednesday.

"As we are at the end of the value chain on crude prices and pay what is available in the market, there is very little we can do except to support a probe into these allegations,” said Peter Noke, national director of the South African Petroleum Retailers' Association (Sapra).

He was reacting to international reports that oil prices may have been manipulated in the same way banks and traders rigged the Libor interest rates.

The Libor scandal erupted last month when Absa parent Barclays was fined a record amount for trying to manipulate the inter-bank lending rates by mis-reporting the amount it cost them to borrow, sometimes working with other banks.

International reports on Wednesday claimed that motorists could have been feeling the brunt of oil rigging by being overcharged at the pumps.

An official report for the G20 group of world leaders questioned the reliability of oil prices and warns that the market is wide open to manipulation, according to the reports.

The G20 report, published by the International Organisation of Securities Commissions (Iosco), warned that traders have opportunities to influence oil prices for their own profit.

According to Noke, international crude prices play a major role in the pricing structure of South African fuels.  

For example the local pricing structure is based on two elements:  BFP (basic fuel price) - elements within the BFP are based on international issues, among others international crude prices and the rand/dollar exchange rate (up to refinery gate); and domestic elements (from the refinery gate to end point).

"We import crude, because we do not have our own, except for Sasol fuels. They are remunerated at the same rate as a 'coastal refinery'."
 
Petrol price hike expected in August

Noke feels fuel prices are too high internationally. However, in saying that, he says we need to remember that the final pump price is based on many elements.

"A large contributor within our fuel price make-up is taxes and levies which are determined by the government.

"Currently the total taxes and levies on 95 octane fuel in Gauteng amounts to 307 cents per litre (c/l). This is made up of levies and taxes (including the RAF): 289.5c/l;  Central Energy Fund levies: 7.53 c/l and demand side levy on 95 octane: 10.0 c/l.

"Given all this, South Africa is by far not the most expensive on taxes of fuel in the world.

"One needs to bear in mind that all over the world governments tax fuel as an income generator that crosses all borders, types of vehicles, regions, provinces, race or creed,” said Noke.
 
Noke added that the latest fuel price indicators show for an increase of 12 c/l in the pump price of petrol and 8 c/l on diesel. “For the period under review, the average crude prices are $99.96 and the rand/$ exchange rate R8.24.

"However, there may well be a portion of the price allocated for the 'slate levy' (a levy paid by the motorists recovering money “owed” to the oil companies) that could be refunded, as the slate account is just about zero again.

"This amount could be between 4c/l and 6c/l."

See here how the fuel price is calculated. (Source: Sasol)


Comments
  • spartanx93 - 2012-07-18 22:50

    Then why does Sasol's coal derived fuel cost as much as oil based fuels??? Rigging going on there?

      Gerthard Coetzer - 2012-07-18 23:04

      because the government regulates the fuel price...

      clive.pops.5 - 2012-07-18 23:42

      The difference is paid by Sasol, or to Sasol, quarterly.

      Renny - 2012-07-19 07:22

      If we could only see the benefits of these levies.

      gary.bloom.967 - 2012-07-19 07:24

      Diesel isn't regulated and yet Sasols prices at the pump for the product is among the highest.

  • muruti.malungana - 2012-07-19 01:06

    Daylight robbery

  • victor.windsor - 2012-07-19 06:06

    Rubbish ! if we can stop the e-tolling then we can do something about the petrol price! Power to the people !!!!!!

      squeegee.pilot - 2012-07-19 07:17

      I'd like to see this genius plan of yours victor - from outside the country. We are competing for fuel on the international market. If we don't buy it someone else will and SA will come to a grinding halt. Government will nationalize Sasol and only blue light brigades will have petrol. Nice quiet roads, but no food will be delivered to shops, etc, etc.

  • Vince.York - 2012-07-19 06:29

    No differently to how AA & now BEE has escalated South African commodity prices many times more than the pre 1994 system combined with the incremental effect of those Robyn Island prisoners Trust Funds, which are the forerunners of the ANC Chancellor House "Investment Vehicles" to strangle the economy far greater than any octopus would. The small group of now ultra quick rich blacks are simple killing our nation, through tax, and now it is being SHOVELED out in largesse to kings and tribals in ever greater volumes as democracy is pummeled into the ground. Angola is 40 Kwanza to the litre for diesel, and AKZ60 for petrol, with the Kwanza being exchanged at approximately 100 to the US Dollar, representing somewhat 5 ZAR cents PER DIESEL LITRE and they are our virtual next door neighbours ??????????? How our commie black businessmen like the fruits of PRIVATE TAKE ALL!!!!!!!!!!!!!!

      khotso.letsie - 2012-07-19 06:51

      and they produce their own.... in large quantities, too!!

  • chris.cunning.14 - 2012-07-19 07:09

    Sorry Holmes. Not buying it. If I remember correctly sometime ago SASOL was contributing 30% or 40% to fuel, cannot be the same price. And who cares if our prices are marginally cheaper. We a 3rd world country. When we a first world, then we can compare.

  • chris.geale.1 - 2012-07-19 07:30

    My question here is why we base our petrol price on the price of Brent Crude, when we get our crude from Nigeria and Iran? These countries are about $10 per barrel cheaper than Brent!

  • mutizde - 2012-07-19 07:30

    http://www.thisismoney.co.uk/money/cars/article-2127644/Worlds-expensive-petrol-hotspots-revealed-Norway-tops-charts--does-Britain-make-ten.html

  • Cindy Jackman - 2012-07-19 07:42

    African deal on better pricing. Nigerian crude oil for SA gold.

  • anton.coetzer.18 - 2012-07-19 08:14

    The government will never deregulate the price of fuel! If they do the garage owners’ battle for sales will result in all the pump attendants being sacked (we would have to pump our own fuel like it’s done in other countries). Do you think they will allow that???

  • Renny - 2012-07-19 08:55

    Hey, I've got an idea, nationalize the petrol industry so we can have free petrol, now we talking.

      shanleigh.sewsanker - 2012-07-27 14:12

      were is juju wen u need him! lmao

  • Philip Mostert - 2012-07-19 09:28

    Take of tax on fuell, then it will be cheaper!

  • peter.kelly.921025 - 2012-07-19 13:32

    Still 30% cheaper in SA versus UK and Europe. just the gravy train that steals from us makes it all the more out out of line!

  • owlcritic - 2012-07-19 14:09

    The competition issue is a valid one. Throughout Europe there are constant 'fuel price wars' going on. One will invariably find one brand to be say 1.89 euro and a stones throw further another brand will be 1.83 euro or perhaps 1.90 euro.. Point is one can shop around. Here in good old R of SA, no such luck! Whether it is strict regulating or simply monopolistic behaviour or blatant colaboration and price fixing one will probably never know! As to the tax-element, as per usual the people are seen as a cash cow to be milked for all they're worth at any pretext for so called benefits that are never tangible or visible anywhere. The pricing method begs the question, why Brent Crude? It is only ONE of at least THREE brokerages (that I know of). Does South Africa buy every drop of oil from them? Doesn't our dear government who is so hung up on negotiations in all else, shop around and negotiate a bit? Moerover, Oil is not bought on daily prices but on futures so how come we suffer price shuffles as if that weeks or months quoted rates are the determining factor? It may very well be of course, that beside feathering their own nests, our beloved leaders regard us as too stupid to understand the 'big picture' so treat us as mushrooms - if you get my drift.

      Rational100 - 2012-07-20 14:04

      @owlcritic...SA is a net importer of fuel and if it's not regulated u run the risk of pockets of insufficient supply within the country and the region let alone a chaotic environmental carnage. That said, the margin derived by the investor (oil company) is presumed to be a reasonable return on investment as overseen by Govt. SA refineries are small and archaic by international standards and if you aspire to use world class technology from various OEM's (original equipment manufacturers) it is unavoidable that u have to go with the flow and entice investors to upgrade equipment and product specs. Deregulation may sound good and fashionable but when pockets of supply shortages shock the economy, u may begin to realize how risky it is to allow free reign as u propose. In the big scheme of things, we are too small to matter in the world of oil trade...infant the whole African continents accounts for less than 8% of global demand..

  • tempisfugit - 2012-07-27 13:26

    Why not reduce petrol levies? You are sucking us dry! We need to get to work to earn money to pay tax, now we must pay tax on tax on tax on tax! Extortionist!

  • shanleigh.sewsanker - 2012-07-27 14:08

    every time the fuel price goes up, there's an article saying that SA has no control about the increase in price. But when it goes down who has the control? #Justobservingandasking

  • SarelJBotha - 2012-09-04 14:56

    Boycott Sasol, until they force the government to remove all taxes from the prices. There is no other way we can make our words heard, so sadly pain needs to be inflicted to get their attention.

  • pages:
  • 1