OPINION | How SA can reduce its vulnerability to fuel price shocks

By Gavin Kelly

Global fuel market dynamics play an enormous role in determining fuel prices. Supply and demand remain very relevant in what the global customer is prepared to pay for a barrel of oil, as well as the perceived shortage that drives a buying spree and thus the price for a barrel.

Oil is primarily bought with US Dollars, and the value of the Rand against the Dollar plays a further (in our case) negative role in resulting in more expensive fuel at the pump.

Unfortunately, most petroleum products (crude oil and refined petroleum products) consumed in South Africa are imported, and this directly results in the domestic fuel cost either rising or falling.

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The March increase was primarily caused by the increasing global oil prices, geopolitical concerns, and the growing instability in the global supply of energy networks.