Bad news as all this results in is every single item going up price as the country is so heavily reliant on road transport. Imported goods arriving at the Port of Durban are trucked into the interior due to the failed rail infrastructure. Everything will rise in costs and we never see prices come back down.
I actually find this quite scary how much the price of petrol varies from one country to the next and if you take the top price of Hong Kong being $3.10 and the bottom price of Libya being $0.03 c that is a significant difference. Ok Libya is not the best example so maybe we go a little higher up the list and select Malaysia in 94th spot with a price of $0.47c per liter.
It does make you wonder why the prices are so high considering the countries are importing crude oil and are then refining this using there own refineries into other products like petrol, diesel and other chemicals. We are all being royally screwed one way or another.
I say this because South Africa has no refineries and all of it's fuel needs are bought in as finished products so the cost of using another refinery has already happened and is like a double transport fee.
Next month the prices in SA are going to rise again and this always happens on the first Wednesday of the month. Crude oil as dropped by roughly 10% in price yet we are going up by nearly R1 per lite across the board which is another $0.05c which will bring us to around $1.30/l. This does not help the economy which is already struggling with up to 60% unemployment. The government clearly does not care and expect that number to rise.
We know governments tax the hell out of fuel as this is one of their cash cows that fill their coffers. In SA we have tings like the Road Accident Fund which pays for the masses and is like their insurance fund for everything traffic accident related. Most places the people have their own insurance to cover these costs and why this does not make proper sense. A percentage of every fuel sale goes towards the RAF and one can only imagine the corruption happening here.
Forecasters predict the inflation in SA will be around 4% this year and I suspect that it will be way above this especially when you factor in a weakening Rand. This will be the second price rise in fuel this year and we are only going into the second month so the 4% inflation is utter nonsense as if you factor in all food goods need road transport for deliveries we are already at 4% in February.
Until SA has it's own refinery we will always be beholden to market swings and exchange rates not being able to bulk purchase. You would think this having their own refinery being top of their agenda, but someone is making fortunes importing the energy needs so this will be deferred for as long as possible. This is not about the country and is more about how much they can make in the mean time which is big money.
Posted Using INLEO