The pinch of the pump

In a time where every penny counts, you should be cautious about where to spend it, says Neels van Heerden.

- Neels van Heerden

The recent sharp increase in fuel prices has all South Africans in a stranglehold. It’s not just at the petrol station where life is becoming costly; the cost of living is rising daily. Food is more expensive, keeping your generator running costs more, and you must count your pennies carefully before going camping.

According to the government, the primary reasons for the price hike are twofold: Saudi Arabia, one of the largest oil producers in the world, reduced its crude oil production by a million barrels a day at the end of August. Additionally, our struggling currency isn’t helping matters.

But why has the price of diesel spiked even more? As it turns out, Russia has also quietly reduced its crude oil production since early this year. South Africa and Russia are members of the Brics group, and Saudi Arabia has been invited to join next year, but it doesn’t seem like we are getting any special treatment. Clearly, friendships don’t count for much when it comes to calculating South Africa’s fuel price.