What is This
Are we paying market related prices for our petrol? This page gives an indication
of the difference between petrol prices in the USA, Europe and South Africa.
The comparison is not straightforward – many factors come into play, the most important
of which are shipping and related costs, and government taxes. For instance, the
USA produces most of its own oil, and has relatively low taxes on fuel. On the other
extreme, Europe gets most of its oil from the North Sea, so it has very low transport
costs, but there are very high taxes on the fuel, thereby making the pump price
much higher than in South Africa.
The fuel prices in this page only reflect pump prices, which already include all
costs and taxes.
Why is Brent crude used to determine the fuel price?
Brent crude is a light crude oil from the North Sea. South Africa nearly never imports
Brent crude, but instead imports most of its oil from the Middle East, and also
sources a substantial portion of refined fuels locally from Sasol, so why is Brent
crude prices used to calculate our fuel price?
Brent crude is one of the world’s most important reliable benchmark crudes, and
the price responds quickly to price signals from the market. It is also one of the
crude oil prices that is always available. Two thirds of the world's traded crude
oil supplies are priced relative to it, so the price of the crude oil that South
Africa imports always moves up and down relative to Brent crude. The price of Brent
crude is also close enough to the basket of crudes that South Africa imports, that
it makes no substantial difference to the fuel price calculation.