The Rise in Petrol Price in South Africa: When it will happen and what to expect
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The price of petrol in South Africa has been steadily increasing over the past few months, hitting a new high on Friday, 5 August. Petrol prices have been rising steadily since the beginning of this year, and this upward trend seems to continue at least until the end of 2018. This article will explain what’s causing the rise in petrol prices in South Africa and what you can expect from now until the end of the year.
What is Causing the Rise in Petrol Price in South Africa?
Several factors have caused the increase in petrol prices in South Africa, but the most significant is the increase in global oil prices. The price of crude oil has risen dramatically in recent months, with the cost of a barrel of oil increasing by 70% since the start of the year. Crude oil is the raw material that fuels refineries, producing petrol and other products. As a result of the rise in crude oil prices, the cost of producing petrol in South Africa has also increased.
Government Policies Affecting Fuel Prices In South Africa
Government policies and regulations also influence petrol prices in South Africa. Some government policies and regulations that affect the price of petrol include excise taxes, levies and the Retail Competition Act. These laws determine the amount of taxes levied on different petroleum products and how these taxes are distributed among various sectors of the economy.
How The Rand and the Exchange Rate Affect Fuel Prices in South Africa
The Rand has been steadily losing value against the US dollar in recent months, one of the factors affecting the price of petrol in South Africa. The Rand is a foreign exchange that is used in South Africa, along with many other countries. Like most countries, South Africa’s citizens and businesses use the Rand to buy worldwide goods and services. The value of the Rand is determined by many factors, including the demand for the currency, the supply of the currency, and the demand and supply of other currencies. In recent years, the Rand has been losing value against the US dollar, as many investors fear that the Rand may become weaker than the US dollar. However, the Rand has recently been on a recovery path, with the Rand strengthening against the US dollar. This may be because investors expect the price of petrol in South Africa to increase further and now appear to be betting on this.
Factors Affecting the Cost of Transporting Oil
The price of crude oil affects the cost of transporting oil. The cost of transporting oil depends on the size and specific needs of the oil tankers that transport oil. The oil demand is also affected by events such as port closures, fires and explosions at oil refineries, and political instability in oil-producing countries.
Conclusion
The rise in the price of petrol in South Africa is caused by a number of factors, including the increase in global oil prices and government policies that affect the cost of transporting oil. The Rand is also on a downtrend against the US dollar, which may encourage South African investors to bet on an increase in the price of petrol. However, it’s important to remember that the price of gasoline is determined by the cost of producing and transporting the fuel. These factors are unlikely to change significantly soon.
