The Department of Energy (DOE) has noted that its daily snapshots are not predictive and do not encompass other possible modifications, such as slate levy adjustments or retail margin changes. The department determines these adjustments, which consider various factors, at the end of the month.<\/p>\n
Domestic fuel costs are primarily governed by the rand\/dollar exchange rate and international oil prices. In South Africa, the fuel price is adjusted on the first Wednesday of every month based on these two factors.<\/p>\n
FNB reported, however, that within the total price of fuel domestically, taxes and levies make up 31%, with the General Fuel Levy and Road Accident Fund Levy accounting for the largest portion.<\/p>\n
\u201cThe GFL goes to National Treasury, and the government is free to utilise this levy in any manner it deems fit. The RAF levy can only be utilised for road accident claims,\u201d FNB said.<\/p>\n
Rand<\/strong><\/p>\n The rand has been on a downward spiral of late following allegations by the US ambassador that South Africa supplied arms to Russia, adding pressure to the already buckled currency.<\/p>\n On 12 May, the domestic currency reached its weakest point on record at R19.47 to the greenback however has made a slight recovery to date.<\/p>\n Revised economic growth forecasts from JPMorgan cut the country\u2019s GDP expectations to -0.2% for 2023, paired with constant rolling blackouts and negative international investor sentiment weighed on the rand.<\/p>\n The Bureau for Economic Research (BER) reported that load shedding had been the consistent drag on the currency, with increased anxiety surrounding the possibility of higher stages of load shedding over the winter.<\/p>\n Global factors are largely not to blame for rand weakness, said economists at the BER. Compared to other emerging currencies, the rand\u2019s depreciation is far quicker.<\/p>\n Oil<\/strong><\/p>\n Although the rand has tanked, international oil prices have been the main contributor to expected lower prices in June.<\/p>\n On Tuesday (16 May), Reuters reported that oil futures traded sideways after mostly weaker-than-expected data from China muddied the outlook for demand from one of the world\u2019s top crude importers.<\/p>\n Brent crude currently sits at $75.24 a barrel following a recent slide way below the $100 mark earlier this year as the energy crisis was in full swing and the Russian war in Ukraine crumpled supply.<\/p>\n Oil prices have consistently declined since the start of April as concerns have grown over fuel demand in the US and China.<\/p>\n Throughout 2023 there have been conflicting narratives surrounding global demand and supply. Analysts from Bloomberg added that the recent weakening of crude oil could be attributed to concerns over the US Federal Reserve\u2019s tightening measures and the possibility of a US recession, which outweighed the positive impact of OPEC+ implementing an unexpected output cut and the US plan to replenish strategic reserves.<\/p>\n According to Bloomberg, the US is soliciting bids for up to 3 million barrels of crude oil to refill its depleted Strategic Petroleum Reserve.<\/p>\n \u201cThe move marks the agency\u2019s second attempt to begin replenishing the Strategic Petroleum Reserve after it released more than 200 million barrels last year, partly to curb high energy prices,\u201d said the publication.<\/p>\n Oil traders have also been closely monitoring the possibility of the government refilling its reserve, as such purchases would tighten the market.<\/p>\n![\"\"](\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2023\/05\/Petrol-15-May-update-overunder.jpg\")
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