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SEE: What are Southern African countries paying for fuel?

2018-05-15 08:34

Image: iStock

When oil prices surge and the Rand retreats, going anywhere nice – or even anywhere necessary – fuel becomes a lot more expensive.
 
As global crude oil prices touch four-year record levels of nearly $80 per barrel, uncomfortable increases in fuel pricing appear inevitable. South African petrol and diesel prices are set to increase again. In only the last three months the highest grade of inland fuel has risen from R13.76 to R14.97. 

The more you spend on fuel, the less you have available to spend on other things and the more expensive most other commodities become as nearly all goods are transported by a liquid-fuel supply chain.

Fuel price vs affordability

According to Bloomberg's fuel price index, SA ranks 20th in terms of the most expensive petrol, 56th in terms of affordability of fuel and 60th for income spent on filling up.

With an average daily income of R237.13, it takes 5.98% of a day’s wages to afford a litre of petrol in SA while the average driver uses uses 202.07 litres a year, which takes up 3.31% of a typical salary, reports Bloomberg.

What about our neighbours?

South African fuel prices are on an upward trend but how do we compare to our neighbours?

An uncomfortable truth is that Southern Africa is not home to reasonably priced petrol, despite Angola is Africa’s second largest exporter of oil. Africa’s most expensive fuel is to be found in Zambia, where a litre of petrol costs R18.81. Zimbabweans don’t have it much easier at R16.53. 

Annoyingly most of South Africa’s other region neighbours and trading partners – Namibia, Botswana, Mozambique and Malawi – have cheaper fuel. This despite the fact that South Africa is the oil to liquid fuel refining, storage and distribution powerhouse of Southern Africa. One explanation is our governmental tax regime, where fuel price increases are bloated in an attempt to balance budgets by that most accessible revenue stream - the private motorist. 

Unsurprisingly Angola has by far the cheapest petrol, regionally, at only R8.48 per litre. It’s worth noting that there exists an uncomfortable correlation between low fuel prices and even lower quality of life.
 
Wider afield in the African scenario, Sudan’s fuel price is the lowest at a mere R4.18 per litre, but would you want to drive in Khartoum? If one tabulates a top-ten list of the cheapest countries in the world to fuel your vehicle with petrol, Africa has four nations on that list: Sudan comes third, Algeria (R4.42/litre) fifth, Egypt (R4.54/litre) in sixth and Nigeria (R5.52/litre) rates tenth. 

Africa’s best compromise between quality of living and affordable fuel is Botswana, where a litre of unleaded costs only R10.33. That’s not much behind the world’s most unashamedly car-obsessed nation, America, where a litre of gas (as they call petrol) retails for R10.08. South Africans last had access to petrol prices that low in 2011. 

Committed government policy weaned America off Middle-Eastern and Venezuelan imported crude oil, by developing a strong domestic shale-to-oil industry. it’s inexplicable that South Africa’s world-class coal to liquid fuels industry has not been given more incentives by government to do the same. 

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Read more on:    bloomberg  |  africa  |  fuel prices

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