22 April 2002Oil, oil and the fuel price
|K*k & betaal|
Interesting piece of reporting at http://www.marketpredict.net last week. According to them South Africans won't need to worry about "running away" oil prices. Maybe they should consult with the ANC first before reporting the rubbish they published.
They reckon that we will never see the 1973 episode again, when South Africans were limited to Seventy Kilometers per hour on our national highways. And this is in spite of the Isreali and Palistinian conflict. Crude oil is still about 40% higher than February levels and will (according to me) definitely rise even higher. The International Energy Agency reckon that industrialised nations have a stockpile of four-billion barrels which represents a 114 day global oil import. The IEA prevented skyward prices during the Gulf war by supplying the market with 2.5 million barrels a day. OPEC apparently account only for 30% of the worlds crude oil demand.
When I look at the above it becomes more of a mistery than ever before why South Africans have to put up with a fuel price hike every month. Last month the price of fuel went up by 25 cents a liter. Next month it is expected to go up by another 35 cents. Currently we are paying R 4.03 per liter. Diesel and paraffin has gone up by a minimal margin. Now it is logical what the impact on the economy these rising prices have?
The government is in a tiff about obtaining their inflation targets. With the fuel price going up, so are interest rates. This causes more problems for the average (re. middle) and lower class citizen. Then again, when you're part of the elite (majority black and in government), this does not impact your way of life. Most of these so-called "servants of the people" live in upmarket neighbourhoods and socialise with the other top elite. They don't have a clue!
The following was published by CarToday :
With motorists still trying to come to terms with the possibility of another huge petrol price increase in May, consumers now also have to face the prospect of an interest rate hike in June, after inflation rose again for the fifth consecutive month.
The consumer price index (CPIX), which is used by the Reserve Bank to determine inflation targets, rose to eight per cent last month, up from 7,5 per cent in February. The CPIX measures the official inflation rate excluding mortgage bond rates. This is two percentage points higher than maximum value defined by the target of between three and six per cent.
The headline consumer price index (CPI) rose by an annual rate of 6,6 per cent. This is up from 6,1 per cent in February compared to expectations of a 6,5 per cent increase.
The South African Reserve Bank raised the repo rate by one per cent to 11,50 per cent in March. All the major banks raised their interest rates to 15 per cent in response to this move.
Speculation is rife that the Reserve Bank will raise its key repo rate by 100 basis points at its next policy meeting in June. This will bring the total rate hikes this year to three percentage points.
Statistics SA said the main contributors to the figure included annual increases in the price indices for food, housing, medical care and transport.
The annual percentage change in food prices was 13 per cent. This was up from 11,7 per cent in February.
"The increase of 13,0 per cent was mainly due to annual increases in the prices of meat, grain products, vegetables, milk, cheese and eggs," the organisation said.
CARtoday.com reported on Tuesday that the petrol price could hit an all-time high in May, with expectations that it is to rise by about 25 to 30 cents a litre. This would bring the total increase since the beginning of the year to a massive 65 to 70 cents a litre.
Prices are currently R4,03 for 97 unleaded and leaded in inland areas, and R3,96 for 97 leaded and R3,92 for unleaded on the coast.
The figures went up by eight cents a litre in January, followed by a six-cent increase in March and a massive 25c jump in April. The price is currently under-recovering by 30 cents a litre.
Just out of interest, follow this link and see what comments your average South African have on the above. Are these the general views representative of the whole of South Africa? One can only speculate. But you can bet your bottom dollar that most will agree. The strangest part of the ever increasing fuel price, why don't we see taxi owners and drivers coming into an uproar like they did a couple of years ago? What are they getting to keep them going and quiet? Maybe they're getting subsidised to a point where they're getting fuel at the same price than what Mugabe gets his fuel from South Africa. It is a known fact that neighbouring countries who source their fuel from South Africa, has lower fuel prices than here.
Now where are government's priorities? Definitely not with South Africa.