Economist warns of steep petrol hike

2011-03-28 11:48

Johannesburg - Petrol may rise by as much as 52 cents per litre next month, according to Tony Twine, an economist at Econometrix.

Twine said tariff increases would make the hike steeper.

"We're looking at a 28c per litre increase in the petrol price, 18c for fiscal revenue and the Road Accident Fund and a further 6c, which is the National Energy Regulator of SA's pipeline tariff. This all adds up to 52c per litre for petrol," he said.

Twine said the last time there had been an increase of a similar magnitude had been in 2008, when the crude oil price was shooting upwards.

"I think we hit a single month price adjustment of 60c per litre of petrol," he said.

Apart from the taxes, which were about 40% of SA's April petrol price increase, Twine said the main driver was the price of crude oil.
"Crude is in everything you can see or touch around you - it's not only in refined fuel but is also present in solvents such as washing powder and paint, fertiliser and carbon black for making artificial rubber. Crude is also contained in bitumen, so the roads on which you drive also have an oil price component."
Referring to the turmoil in the Middle East and north Africa (Mena) region, Twine added that there seemed to be a flat spot in terms of the Arab world's oil prices and the political risks that had underpinned a rise in those prices.

"Brent crude has been trading in a narrow range of $108-$118 per barrel at the top and bottom during the month of March.

"Certainly at each end of that range there's been quite strong resistance to the price breaking out - so I think the range will hold for as long as we don't get any decisive moves."

As a result, over the past few days crude oil had been priced between $113 - $115 a barrel.

"It looks likely this will hold for some time - unless there is a political deterioration in an oil producing state such as Saudi Arabia or Iran."

Twine said that, should this occur, the sky would then be the limit for the price of crude oil.

He said that  if peace broke out in Libya and in any of the other smaller producers, it was possible that the price of crude would decrease to about $100  per barrel in the short term.

"As the northern hemisphere moves into the warmer summer months, we could see crude coming down even further to $90 a barrel or even less."

He said a stronger rand had cushioned some of the oil price surge.

"As the rand has strengthened, it has partly offset higher crude prices, however if these prices suddenly balloon because of some event in the Mena region then we really can't expect the rand to completely cushion the upside of the dollar price of crude."

  • Derek Breetzke - 2011-03-28 12:04

    Time to seriously consider using Bio diesel. Should be R1.50 cheaper per litre.

      branden.hart - 2011-03-28 12:47

      Unless Regulated

      Nicholas Taylor - 2011-03-28 13:49

      Good luck finding the feedstock.

      Gorilla - 2011-03-28 14:11

      ...and stuff up your car wholesomely and then pay buckets of cash in repairs? no thanks. Bio Diesel is going to make the motor trade millions.

      Rod - 2011-03-29 08:32

      Oh Please. Everyone complains about the price of petrol. Petrol has to be dug out of the deepest oceans and transported accross the world and the proccessed. Plus the fact that is can explode enroute. Cocacola on the other hand costs more than petrol and no one complains and all they add is sugar and flavour

      Virginia - 2011-03-29 11:24

      Rod, you cannot compare the prices, as petrol goes up so does coca cola and the rest of your food bill. Its about time this country learned, that what the people have to live on should be kept at a nominal price, especially these third world countries.I can now understand why people from UK and New Zealand say that South Africa is expensive.

  • Ockert - 2011-03-28 12:27

    And you have to be an Economist to predict this ??, more job losses in the offing , as petrol gets taxed to death, and with tolls to come shortly -- more job losses, Unions jumping up and down for increases - more job losses - WAY TO GO

      Rajty - 2011-03-29 09:50

      Take a Berocca a chill dude....petrol price increases are beyond our controll

  • Niknac - 2011-03-28 12:30

    oh no, not again. One should now consider using a gautrain.

      Louis - 2011-03-28 15:27

      That is the ANC's whole plan from the beginning. Even the new Tollroad is a sign of that, You see they WILL make this train work, at your expense.

      Rajty - 2011-03-29 09:51

      Louis- what is your IQ- you have no clue how the world works, and you give the ANC too much credit.

  • logical007 - 2011-03-28 12:33

    Time to seriously consider using the 'horse and carriage' system. Less accidents, cheaper to run, convertible too, so you look 'cool' - or some people do... and no fuel pollution???

  • Funkymonkey - 2011-03-28 12:34

    Time to clean the cob webs off the old bicycle.

  • Daveza - 2011-03-28 12:36

    Taxis are going to throw all their toys out and demand exemption.

      Bratt - 2011-03-28 13:14

      and sadly they will get it. Which means you and I will pay more than '52c' per litre to make up their share.

  • Niknac - 2011-03-28 12:36

    oh no, one should really consider using alternative form of transport now.

      Gatvol - 2011-04-28 16:59

      Consider buying a scooter. I have one, fuel consumption around 36km/l

  • SilentGenius - 2011-03-28 12:38

    Time to deregulate the petrol price....

      Fredster69 - 2011-03-28 12:57

      Yes, I agree...

  • ji - 2011-03-28 12:49

    maybe if the ANC and all its departments stopped stealing , going on over seas holidays , renovating government home ,having expensive workshops and youth meetings there would be enough money to lower the petrol price .

      Rajty - 2011-03-29 09:53

      By 1 c want government to pay for your petrol you arrogant prat.

  • MACH1000 - 2011-03-28 12:52

    That leaves just one choice. Kawasaki, Suzuki or Honda?

      Observer - 2011-03-28 13:07

      Ag no man, Kawasaki broke my ankle last week!

      Spanners - 2011-03-28 13:17

      BMW R 1200 GS

      Ian - 2011-03-28 13:18

      eish i already have a ZX6 Ninja

      Jo-Anne Alexander - 2011-03-28 13:24

      :) mach1000 YOU SOUND LIKE MY HUSBAND RIGHT NOW. Everytime the petrol price goes up he tries to convince me that a bike for him would be so much better.

      2wheeler - 2011-03-29 06:35

      GS Adventure 4 me!

      Tsitsikamma Firehawk - 2011-05-05 15:37

      Been using a Suzuki 600 for almost a year now. Not really cheaper than a small car though when u consider maintenance, insurance, etc. But what a ride. My argument is that I am doing my bit for the environment :) Been to Vietnam recently, I do think that scooters are a good option.

  • Colline - 2011-03-28 12:57

    the bottom line is, HTF are we meant to keep forking out more and more and more and more!?! and so a third world is made.

  • GeneralCS - 2011-03-28 12:58

    A lot of people are able to work from home. I think companies need to start catching up to the 21st century and let their employees work from home, even if only 2 or 3 times a week.

      laylad - 2011-03-28 13:22

      at last something that makes sense

      Raymond - 2011-03-28 19:31

      Brilliant idea.I hope that this will be implemented soon.'Ek kan nie meer nie'

      kidblack - 2011-03-29 01:11

      i work from home. 3 computers and a dsl line. i think i used half a tank the entire month.

  • bosegoos - 2011-03-28 13:02

    I can understand the 28 cents per litre increase occasioned by the oil price over which we have no control. I can't, however, see why the RAF should get another 18 cents - this organisation is riddled with corruption and should get no more state funding. Is it not time to privatise the RAF? The pipeline tariff could also be postponed until the economic situation has improved.

  • ZACKIE - 2011-03-28 13:08

    govt is killing us with taxes we must toy-toy

  • Gore - 2011-03-28 13:10

    Mr Economist dearest!! Why the h#ll is the increases in fuel price NOT filtering in increasing the INFLATION rate? All our salary increases will be linked to that low low inflation rate.I guess the "inflation basket" was adjusted to hide this - a bunch of criminal, just stelling from man in the street!!

      Rajty - 2011-03-29 09:54

      Learn to spell before you dispense your view on economics

  • Spanners - 2011-03-28 13:18

    can you all touch your toes, take it like men, love the goverment! :-)

  • Rodney Emmerich - 2011-03-28 13:47

    Why can't we import less oil and export less coal and let Sssol produce more fuel , that way we can control our petrol/diesel price from within , or am I missing something???

  • Kenneth - 2011-03-28 13:47

    I mean seriously south africa should just plan its own military campaign to steal some oil already...

  • fatpas - 2011-03-28 13:49

    It's not only the motorists that suffer, everybody suffers when the petrol price increases as everything goes up, from basic foodstuffs to luxury goods. It's only Zuma and his overpaid ANC cronies who don't suffer as they get everything for nothing even the millions they steal.

  • Nwali Muhulu - 2011-03-28 14:43

    Is Tony Twine an economist/prophet or he is getting classified information from the energy department; I think someone need to be investigated within such department as everytime he claimed to predict, it comes exectly like that???

      Frank - 2011-03-28 16:58

      Tony Twine is a paricularly good economist specialising in the motor industry. Always on top of his game and (nearly?) blind (which is relevant because it is mind-blowing seeing a blind person giving a presentation involving lots of numbers without any notes and being so accurate in the presentation and with his forecasts).

  • beetle001 - 2011-03-28 14:49

    One wonders, since Sasol provides a huge part of our fuel, and they don't use crude oil to make it, why it's always blamed.

      Ockert - 2011-03-28 15:40

      The enrichment of the owners and shareholders of SASOL.

      Ockert - 2011-03-28 15:45

      No this wont happen, because then the "Owners/Shareholders" of SASOL will lose out on income

  • Nwali Muhulu - 2011-03-28 15:00

    Is Tony predicting the increase or he is been given classified information so he sound like a great Economist of man kind. All the time he predict, it comes exectly like that. Someone must be investigated.

      Ockert - 2011-03-28 15:41

      Tony the "Economist" is a mouth piece for the guys in charge of the raising of prices ??

      Ockert - 2011-03-28 15:44

      Economists are overpaid guys, who add no real value to anything

  • muthivheli.nick - 2011-03-29 07:01

    Gadaffi he produces 2.7 million barrels a day....? To fight him is like killing your self

  • Maxi Brazil - 2011-03-29 07:27

    Let the Fatcats at PetroSA entertain another couple of busloads of employees at the Soccer WC in PE. Their account of course... No cost to the taxpayer!

  • HAggardGnome - 2011-03-29 08:42

    Nuke Gaddafi! Get the turmoil over with!

  • Rajty - 2011-03-29 09:56

    Shame Tony- this is the drivel that you have to put up with when serious issues are posted on a website frequented by gutter trash...I counted 1 sensible suggestion....

  • Virginia - 2011-03-29 11:20

    Is it not about time that the authorities stopped increasing the petrol and rather made everyone pay Tax. Stopped giving tax incentives to all. Increasing petrol means up goes the food, transportation, everything that the working class must use. The government is keeping the poor, poor and the working class is getting there.We are going to have to get bicycles like the Dutch and start boycotting the fuel, maybeg then they will get the message.

  • rjpillay - 2011-03-29 11:41

    It is just strange that we have to pay for roads and than still pay higher prices for petrol. As far as i am aware there is a levy in the petrol price for roads maintenance and yet these are not kept in a good state, but the price for petrol just go up and up. Now we have to pay huge amounts of money for tolls for highways that has been paid for as these were not maintained for years yet the money was taken.Get real ANC and Stop Stealing the money.

  • Alex - 2011-03-29 11:44

    very good - well balanced article - nicely composed!

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