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In April 2014, the fuel price in SA reached it’s highest point – R14.16/litre. At more or less the same time the price of Brent crude oil was at a high of US$115/barrel. At the same time, the Exchange rate was about R10.5 to the Dollar. Therefore in round terms, a barrel of Crude oil was R1207/barrel.
This is equivalent to 42 gallons, or 159 litre, therefore the refined cost of the petrol was R1669.5, and the cost of refining, transporting and the levies and taxes was R462.5 per Barrel, or R2.9/litre.
Now, a portion of that would be fixed – transport, refining, etc., and a portion of that would be fluctuating.
Looking at the current price of Brent Crude – US$48.5 per barrel, or at the current exchange rate, R557.75 per barrel. Therefore, the Oil component of the fuel price is currently at R3.50 per litre. If you add the R2.90 per litre that was the cost of refining, transport, levies and taxes when the fuel price was at R14.16/litre, the current fuel price should really be at R6.40 per litre. The current fuel price is sitting at R13.36 per litre. So there is an over recovery of at least R7 per litre.
I was in Zambia recently, and the fuel price there had dropped from KWM 10 per litre – or about R17/litre, to KWM 6.5 per litre, or R11/litre. This is a reduction of R6/litre. Meanwhile, in SA, we had a reduction of R0.8/litre. Something stinks.
At an estimated 24billion litres per year, or close to 66 million litre per day, the over recovery would run at R455 million per day if we assume an over recovery of R7/litre. This is enough to build 2 Nkandlas per day.
Where is this money going to? What is our dear government doing with it? If they are planning to use it to pay off the E-tolls – the cost of road construction is R17 billion, the cost of the e-toll system is R3 billion according to the Government Gazette dated March 26 2012 – they could raise the required R20 billion in 43 days, or 1.5 months.
However, I have my doubts.
