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Fuel price hike: Levy reduction cushioned the blow but has not eased the pain, says AA

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The latest fuel price increase, which kicks in today, could have been worse, were it not for the government’s decision to decrease the fuel levy.

File picture: Neil Baynes/African news Agency (ANA)

THE FUEL fuel price increase, which kicks in today, could have been worse, were it not for the government’s decision to decrease the fuel levy.

Last week Finance Minister Enoch Godongwana announced the reduction to the fuel levy, which would be implemented from today until the end of May to offer some relief to consumers who have felt the effects of rising fuel prices that have resulted from numerous factors, including the conflict between Russia and Ukraine.

“This intervention will bring much-needed relief to motorists because it will cushion the high fuel price increases that were anticipated this month, which were as a result of the global factors. The increases in both petrol and diesel would have been close to R2 per litre and over R3 per litre respectively if there was no intervention,” Energy Minister Gwede Mantashe said.

Petrol (both 93 unleaded petrol and leaded replacement petrol) increased by 28 cents per litre (c/l).

Petrol (both 95 ULP and LRP) increased by 36c/l, diesel (0.05% sulphur) by 152.56c/l, diesel (0.005% sulphur) by 168.56c/l and illuminating paraffin (wholesale) by 266 c/l.

The single maximum national retail price for LP gas increased by 355c/l and the maximum LPGas retail price by 250c/l.

“These are record fuel prices across the board, and while government’s intervention has cushioned the blow somewhat it hasn’t entirely taken the pain away,” Automobile Association (AA) spokesperson Layton Beard said.

Beard said the reduction in the general fuel levy took some pressure off struggling consumers. However, the new fuel prices were still at record high levels and would continue to add financial pressure on all South Africans.

While grateful for Mantashe and Godongwana’s intervention to protect workers against rocketing global fuel hikes, the Motor Industry Staff Association (Misa) still believed the overall review of the pricing methodology for petrol was urgent.

Misa operations chief executive Martlé Keyter said: “For now, the intervention of both departments shielded motorists and commuters from the impact of the crude oil price. The intervention is in line with similar steps other countries have taken recently to relieve the burden.”

The AA acknowledged that there was no quick-fix solution to mitigating rising fuel costs but said current high prices could not be sustained by a consumer base that was already reeling from increased rates, electricity costs, food prices, and public transport fares.

“Going forward, Misa is very concerned about the suggestion by Mantashe’s department to simply cut the profit margins of the retailer in the fuel supply chain. This will only result in retailers cutting back on operational costs by retrenching fuel attendants,” Keyter said.

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