BY PETRO-ANNE VLOK 10 PAIN AT THE PUMPS
In thenews Withthe priceoffuelat almost R22per litre for95octane petrol inland,the mere thoughtoffilling up atankhas motorists breaking outinacold sweat. Theprice of fuel hasshotupsignificantly: unleaded 95 petrol nowcosts R21,84 perlitre inlandcomparedtoR17,32atthe same time last year. Thereare several factorsthatdetermine theprice of fuel,explainspolitical economistDrDaleMcKinley.A majorreasonisthatthe price of brent crudeoil,which is used to make petrol,has shot up followingthe invasion of UkrainebyRussia,amajor oilexporter. Andasthe Covid-19 pandemic started to wane andthe world began to open up again, therewas reneweddemandfor oil. TheOrganisation of thePetroleum ExportingCountries (OPEC)has also kept oilsuppliesconstrained. “So,you getthe picture,”Daleadds. It’s notjustmotorists whoare impactedbythis price increase.Whenfuelismoreexpensive,the whole economyfeels it,saysDale. “Our economyisinintensive care.The middle andworking classes arebarelyhanging on,spendingmorethanhalfoftheir budgets on basics.” Now, theknock-oneffect of therisingfuelpricesonthe price of goods andservicesmeans that they will struggle to enjoyeven thebasics. “People will findaway,but it’ll be difficult.” Directorand chiefeconomist of theEfficientGroup, DawieRoodt,agreesthatmanySouth Africans will struggle to cope. “Foodpricesare also rising,which meansthatinflation will keep on rising –especiallyfor thepoor. Canpeople‘cope’? Jip, butitwill be painful.” Softening theblow Governmenthas stepped in to help take theedgeoff. During hisbudgetspeechinFebruary, finance minister EnochGodongwanaannounced that theGeneral Fuel Levy (GFL)and RoadAccidentFund(RAF) levy (see sidebaron“Levies andtaxes”) would remain unchanged. The<strong>AA</strong>hasbeencampaigningfor this for years,saysLaytonBeard,<strong>AA</strong>headofpublicaffairs and international relations. “Itwas abig winfor the<strong>AA</strong>and consumers. It’s thefirsttimesince 1990 that theselevies With fuelpricesatarecord didnot increase,” he says. high,consumersare feelingthe AndinMarch,withglobal oilpricesskyrocketing duetothe war, Godongwanaannounced that the pinch. We look at thereasons governmentwould temporarilyreducethe GFLbyR1,50 behind theprice hike and what perlitre from 16 Apriluntil 31 May<strong>2022</strong>. youcan do to cutbackonyour “Obviously, the<strong>AA</strong>welcomes thesereliefmeasures,” says Layton.“It doesn’ttakethe pain away buthelps fuelconsumption. soften theblow. Yet, we believethis wasdealt with in a short-term manner.The question remains: What will BY PETRO-ANNE VLOK happen in June andbeyond?” > 11 WINTER <strong>2022</strong> | <strong>AA</strong> <strong>Traveller</strong>