Fuel Prices over the past few years

As a country we hang our heads in defiance when hearing another announcement of a fuel price hike. Over the last ten years the price of petrol per litre has more than tripled. 

 

Let’s look at fuel prices over the past few years and also discuss some factors that contribute to the consistent rise of fuel prices.

 

 

The above image (sourced from www.cars.co.za) may be no news to you. In 2003 South Africans had to pay R4.00 for a litre of petrol.

 

This sound unrealistic in comparison to what consumers must pay now. On average, the petrol price gains nearly a rand a year, although the jumps in the prices have been erratic. Between 2003 and 2013 the petrol price was pushed up with a whopping 339%!

 

 

The year between August 2008 and August 2009 have seen a drop of nearly R2,50 per litre – a welcome reprieve for consumers in South Africa. But the last 4 years has seen the price nearly doubled.

 

This leads us to ask the question – why do fuel prices rise and fall constantly? What factors determine the cost of filling up my car? In the long term the biggest factor influencing fuel prices is the cost of crude oil. In the marketplace however, factors include forces of supply and demand and also competition.

 

Figures released in July of this year indicate that nearly 28% of fuel costs are attributed to taxes. This means that R3,69 of the R13,23 per litre goes to tax. Other factors that influence the fuel price are local market conditions such as supply, demand, competition and government regulations.

 

In the short term supply and demand imbalances will definitely affect prices. Supply shortages due to whatever reason (including transport and worker strikes) will typically cause an upward price pressure. Length of supply, where supply exceeds demand, can result in a downward price pressure.

 

Due to the fact that our oil is  mostly imported, foreign exchange and geographical location play an important role in determining the fuel price. Consumers who live in coastal areas will typically pay a lower price due to the fact that they bypass the costs of transporting fuel inland.

 

So what awaits fuel consumers in the future? Well, that’s difficult to determine with certainty. Some fuel suppliers are starting to implement a comprehensive national energy policy that addresses both fuel conservation (in other words, reducing demand) and increasing the supply of crude oil and refined products. This includes streamlined permitting for petroleum infrastructure as well as increasing domestic oil production in environmentally responsible manners.

 

Ultimately fuel prices are determined by global supply and demand and the market will always decide the price. Consumers who are finding the fuel hikes problematic, should look for alternatives such as public transport or carpooling. 

 

In the end fuel is a much needed commodity, regardless of the effect on its consumers’ pockets.

 

 

Writtem by Marleen Theunissen

Creative writer for ATKA SA

How to get ready for Tax season

 

 

Every year, tax season seems to come quicker and quicker. As we get busy, preparing for the end of the year, planning holidays and business functions to close out the busy year, many of us tend to forget that Income Tax returns need to be filed. 

 

Dates for 2013 have been set between July 1st and the 22nd of November. The cutoff date at the end of November is strictly for returns through the e-filing system, however, and physical returns will need to be filed by the 27th of September.

 

Because the e-filing system implemented by SARS is so much more accessible, convenient and gives you almost two months extra, it is recommended that you get acquainted with it beforehand. There are a few things to keep in mind, however, whether you’re filing manually or through the SARS E-filing system.

 

Firstly, even though it is something that we all tend to do from time to time, avoid waiting until the last possible moment to file your return. For one, if you get it out of the way early, you will give yourself extra time to focus on other things that may take more time. Filing early also gives you the peace of  mind that you won’t have to deal with any congestion that may arise on the e-filing system from overloading, or face any challenges at the post office if that’s how you’ve chosen to do it.

 

Secondly, make sure to be as accurate and honest on your return as possible. Avoid inflating your expenses, or not declaring all of your income (since this is illegal, and since the implementation of the e-filing system, there has been a huge increase in the number of random audits done every year, as well as the efficiency and accuracy of these audits).

 

To make the process easier for yourself, make sure to keep all relevant documents in one place, so you have easy access to them for reference while you’re filling out your return.

 

 

Written by Marleen Theunissen

Creative writer at ATKA SA

Larger tax burden for South African Mining industry

 

 

At the Mangaung conference hosted by the ANC late last year, early talks of a revised mining tax code began, but didn't surface again until the middle of this year. 

 

In a statement released in July of 2013, Finance Minister Pravin Gordhan announced that documents related to the State Intervention in Mining proposal would be reconsidered as part of a complete tax review that could include revised tax rates for the mining industry.

 

The State Intervention in Mining document has lead to speculation that the ruling party would want the taxation of mining commodities to rise to 50% on all activities. A rate similar to this has been implemented in Australia, being stated as a resource rent, but has been met with a lot of opposition throughout the opposition political parties and members of industries that are being affected.

 

As part of the consideration set into motion by Gordhan, an executive committee will review every aspect of the proposal in order to determine whether or not the current tax rate on the mining industry is enough. 

 

The committee, which will be required to provide interim reports to the Finance Minister while making their decision. The decision will require them to consider factors such as the economic instability faced by South Africa, low commodity prices, declining profit margins, rising costs and commodity shortages.

 

Analysts and tax authorities have advised, however, that a higher tax rate would be crippling to the industry, which remains one of the most vital industries in driving the South African economy. 

 

Current tax systems on the mining industry make use of brackets that allow companies and startups with lower profit margins to pay less tax on the use of the commodities than those with higher profit margin, while a set tax rate across the board would mean even more of an unequal balance and causing potential startups in the industry to have to fight an even steeper battle to be sustainable.

 

More information on the revision of the mining tax laws will become available over the next few months, while a more solid decision should be expected during the 2014 State of the Union address in parliament.

 

 

Written by Wesley Geyer

Creative writer at ATKA SA

Fuel Prices

As a country we hang our heads in defiance when hearing another announcement of a fuel price hike. Over the last ten years the price of petrol per litre has more than tripled. 

 

Let’s look at fuel prices over the past few years and also discuss some factors that contribute to the consistent rise of fuel prices.

 

 

 

The above image (sourced from www.cars.co.za) may be no news to you. In 2003 South Africans had to pay R4.00 for a litre of petrol. This sound unrealistic in comparison to what consumers must pay now. On average, the petrol price gains nearly a rand a year, although the jumps in the prices have been erratic. Between 2003 and 2013 the petrol price was pushed up with a whopping 339%!

 

The year between August 2008 and August 2009 have seen a drop of nearly R2,50 per litre – a welcome reprieve for consumers in South Africa. But the last 4 years has seen the price nearly doubled.

 

This leads us to ask the question – why do fuel prices rise and fall constantly? What factors determine the cost of filling up my car? In the long term the biggest factor influencing fuel prices is the cost of crude oil. 

 

In the marketplace however, factors include forces of supply and demand and also competition.

 

Figures released in July of this year indicate that nearly 28% of fuel costs are attributed to taxes. This means that R3,69 of the R13,23 per litre goes to tax. Other factors that influence the fuel price are local market conditions such as supply, demand, competition and government regulations.

 

In the short term supply and demand imbalances will definitely affect prices. Supply shortages due to whatever reason (including transport and worker strikes) will typically cause an upward price pressure. Length of supply, where supply exceeds demand, can result in a downward price pressure.

 

Due to the fact that our oil is  mostly imported, foreign exchange and geographical location play an important role in determining the fuel price. Consumers who live in coastal areas will typically pay a lower price due to the fact that they bypass the costs of transporting fuel inland.

 

So what awaits fuel consumers in the future? Well, that’s difficult to determine with certainty. Some fuel suppliers are starting to implement a comprehensive national energy policy that addresses both fuel conservation (in other words, reducing demand) and increasing the supply of crude oil and refined products. This includes streamlined permitting for petroleum infrastructure as well as increasing domestic oil production in environmentally responsible manners.

 

Ultimately fuel prices are determined by global supply and demand and the market will always decide the price. Consumers who are finding the fuel hikes problematic, should look for alternatives such as public transport or carpooling. 

 

In the end fuel is a much needed commodity, regardless of the effect on its consumers’ pockets.

 

 

Written By: Marleen Theunissen

Creative Writer for ATKA SA