Fuel prices 'controlled by government'

Fuel prices in South Africa are totally controlled by the government which means that even if consumers cut their fuel consumption by 50% it will not bring down the price, says Fin24 users Fanie Brink in response to the article Petrol hikes 'just don't make sense'.

Brink, who says he's prepared to defend his comments anytime on any stage with any professor in economics in the world who disagree, writes:

"Apart from corruption, the big fat cats are the oil companies who get a controlled, guaranteed and very lucrative margin on fuel and the more filling stations they build the higher their reward on their marketing assets.

"The far worse problem, I believe, was created during the period 2007 to 2009 when the Reserve Bank kept on increasing the interest rate on the back of the much higher international crude oil and food prices while local interest rates cannot do anything to curb price increases in the international market.

"By the way, Dawie Roodt (who commented in the article) has always been and still is the loudest singer in the choir for higher interest rates, with my compliments.

"Fuel prices in South Africa are totally controlled by the government which means that even if consumers cut their fuel consumption by 50% it will not bring down the price if the international price increase or the exchange rate depreciates.

"Fortunately the Reserve Bank has come to its senses to keep the interest rates lower with higher stability.

"Unfortunately all consumers have been punished by the Reserve Bank during 2007 to 2009 and they are now struggling because of this stupid policy."

Fanie Brink

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