As fuel prices are expected to go up at midnight tonight, biznews community member John Eccles says too much attention has been focused on the application by Eskom for a tariff increase, and hence the important monthly fuel revision went unnoticed. This is what he thinks about the adjustment of fuel prices.
By John Eccles
During the last few days the South African news media and public have obviously concentrated on the application by ESKOM for a further outrageous tariff increase which NERSA has sensibly rejected. However the other important announcement is the monthly fuel price revision. This month it was again one of shock and horror as the prices are being increased and unfortunately not one of the rare months to celebrate when a token decrease of a few percent is announced. The Department of Energy issued the following press release:
Economic factors affecting the unit over/under-recoveries for the period 29 May to 25 June 2015
The average international product prices of petrol increased whilst diesel and illuminating paraffin decreased during the period under review. The Rand weakened against the US Dollar, on average, when compared to the previous period.
The average Rand/US Dollar exchange rate for the period 29 May to 25 June was 12.3196 compared to 11.9454 during the previous period.
The weakening of the Rand against the US Dollar increased the contribution to the basic fuels price on petrol, diesel and illuminating paraffin by 21.17 c/l, 19.33 c/l and 18.90 c/l respectively.
What I find interesting is the diverse statements issued by the DOE for “economic factors affecting the monthly adjustments”. Recent examples were as follows:
Other factors affecting our fuel prices are the division of the country into geographic price zones in addition to at least 11 other taxes, levies, funds, margins and costs. The consequence of all this regulation and taxes is that at a time of global glut of oil and gas products, the South African industrial and private individual is dipping out totally.
*John Eccles is a biznews community member
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