Big petrol and diesel price cuts announced for South Africa

  • Thread starter Thread starter Shaun Jacobs
  • Start date Start date
Lupus said:
Yet when oil and the ROE was at this last time we were at under R20 a lt hmmm
Click to expand...

The complication to this is that the oil price is an "indication" at best, as I understand it, our fuel price is calculated off the price of finished product from 3 ((i think) major refineries across the globe rather than the actual price of oil itself.

Its also why the price of oil will shift one way, but the price of petrol or diesel could shift differently as we're acutely exposed to global demand curves for specific finished product.
 
ToxicBunny said:
The complication to this is that the oil price is an "indication" at best, as I understand it, our fuel price is calculated off the price of finished product from 3 ((i think) major refineries across the globe rather than the actual price of oil itself.

Its also why the price of oil will shift one way, but the price of petrol or diesel could shift differently as we're acutely exposed to global demand curves for specific finished product.
Click to expand...
The issue currently seems to be the difference between the futures price of oil vs the physical, or spot, price of oil.
  • The futures price of oil is determined by the financial markets, which is what you see when you Google "Price of oil".
  • The physical price of oil is the price a refinery actually pays when it goes into the market to buy oil.
Normally these 2 prices are very close to one another, but since the Iran war the difference between the 2 has widened significantly. Most likely due to some sort of market manipulation.
There is a very interesting press conference held by the Saudi oil minister where he talks about this.
 
WollieVerstege said:
The issue currently seems to be the difference between the futures price of oil vs the physical, or spot, price of oil.
  • The futures price of oil is determined by the financial markets, which is what you see when you Google "Price of oil".
  • The physical price of oil is the price a refinery actually pays when it goes into the market to buy oil.
Normally these 2 prices are very close to one another, but since the Iran war the difference between the 2 has widened significantly. Most likely due to some sort of market manipulation.
There is a very interesting press conference held by the Saudi oil minister where he talks about this.
Click to expand...

Yeah that also plays a significant part in it.

Found this description for how the BFP is calculated which obviously adds even more complexity to it


The largest component of the basic fuels price is the price that one would be paying on international markets when physically importing product to South Africa. The FOB (Free on ship’s board) product prices from different locations in the world, based on international product availability and product quality, are used. The petrol FOB price is calculated as 50% of the Mediterranean spot price for Premium unleaded petrol and 50% of the Singapore spot price for 95 Octane unleaded petrol. For the FOB price of Diesel, the new BFP formula use spot prices calculated as 50% of the Mediterranean price for Gas oil and 50% of the Arab Gulf price for Gas oil, plus the quoted spot price market premiums applicable.
Click to expand...
 
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