Fuel prices have experienced a drop in March 2017, as announced last month by the Department of Energy. The reason being that the South African Rand (ZAR), has become stronger against the United States dollar. However, with high levies in fuel and road accident funds due, South Africa will not feel much of the price fall.
Since the 1st of March, petrol and diesel costs have spiraled downwards. Prices of 95 octane of petrol will slide down by 8-cents, while the wholesale cost of diesel will fall by 2-cents per litre. Illuminating paraffin wholesale prices have also been announced to drop by 8-cents. However, Finance Minister, Pravin Gordhan, confirms that fuel charges are to increase by 30-cents per litre in April; while the RAV will increase by 9-cents; thus, adding 39-cents to petrol and diesel prices.
The Rand and US dollar exchange rate, from the 27th of January to the 23rd of February, was 13.2899 compared to the previous period being 13.5831. This had led to less contribution towards the Basic Fuels Price on petrol, diesel and illuminating paraffin by 13.44c/l, 12.93cl and 12.80cl.
However, apart from decreasing fuel tariffs, April 2017 may experience a removal of the ‘zero VAT rating’ on petrol. In terms of impacting the country, petrol prices can therefore be bound by 14% VAT added towards petrol prices.
So, what is the point of dropping fuel prices, when VAT is said to be implemented on top of petrol? This will only create a toxic mix of high fuel costs combined with demanding economic debt burdens, as many South Africans will experience traveling distress due to their heavy reliance of road transport and driving their vehicle wherever need be.
Apart from the prospective stress of 14% VAT on petrol, starting from the 1st of April, fuel levies are due to rocket by 30-cents per litre.
Continue following CarZar’s news blog, to keep updated with the latest news on fuel.
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