While South African motorists are still reeling from excessive petrol price increases in 2023, it is not the worst year on record for fuel price adjustments.
When looking at how much the price of petrol 95 changed between January and December, no year has been quite as bad as 2021 where the cost of this fuel type rose by a staggering R5.43/litre, or 36.54%, over the 12-month period.
However, petrol rates can see-saw heavily throughout a single year and it’s not always guaranteed that December’s prices will be higher than January’s.
Hence, the year in which the wildest fluctuations occurred was 2005, when petrol 95 reached a low of R4.08/litre in February and shot up to a high of R6.06/litre by October, a rally of R1.98/litre, or 48.53%, in just eight months.
The graph below shows the price changes of petrol 95 in South Africa between 2000 and 2023. The Department of Mineral Resources and Energy’s (DMRE) public records unfortunately do not go back further than this.
What happened in 2005?
The tremendous climb of petrol prices between January and December 2021 is relatively simple to dissect.
At the time, much of the world was still stuck in different phases of Covid-19 lockdowns complicating the movement of oil and refined petroleum products across the globe and pushing up the cost thereof.
Domestically, the rand/US dollar exchange rate depreciated from a low of around R14.50/dollar in January to above R16/dollar by December, and the country suffered record levels of load-shedding which was exacerbated by the worst riots and looting the country has seen in decades.
During the year other elements such as the retail and wholesale margins on fuel as well as distribution and storage costs also collectively rose by approximately 17c/litre.
All these elements combined saw the biggest year-on-year jump in petrol prices that South Africa has experienced in recent history.
With no viruses, a stronger local currency, and a lack of riots, the question is what happened in 2005 for fuel prices to have taken such a beating?
Back then, the DMRE ascribed the record fuel costs of over R5/litre to oil price levels which the world had never seen before at the time.
The United States as one of the globe’s largest oil producers was hit by an unusually severe storm season with Hurricane Katrina threatening to do lasting damage to vital US oil and refining assets in the Gulf of Mexico, Al Jazeera reported in August 2005.
This saw the US shut down over 40% of its production capacity, with oil prices consequently leaping to as high as $70.07/barrel and staying at these elevated levels for a considerable amount of time.
In January 2005 the rand swapped hands with the greenback at a rate of around R5.60/dollar, reaching a peak of R6.97/dollar by July and dropping back down to R6.30/dollar by December.
These fluctuations created the perfect storm for all-time-high fuel prices.
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