07 Jul 2018 21:08 -


2 months ago

LATEST FUEL PRICE HIKE UPDATE: Latest on fuel price hike interventions from Government...

Due to concerns about the recent fuel price hike, President Cyril Ramaphosa has convened a meeting of the Ministers in the Economic Cluster to discuss the current fuel prices and deliberate on interventions government can make.

The meeting, which was held on Thursday, resolved that the VAT commission could be expanded to include the fuel price.

The recent fuel increase saw the fuel price rocket to R16.02 a litre of 95 ULP inland. The July increase follows from another price increase in the past month.

“The Ministers in the Economic Cluster resolved to engage various stakeholders including those in the transport sector, civil society organisations and social partners in the National Economic Development and Labour Council (NEDLAC) as a matter of urgency with a view of finding a common approach to this challenge in the best interest of the country,” the Economic Cluster said in a statement on Friday.

Government said the main player in the determination of oil pricing internationally is the Organisation for Petroleum Exporting Countries (OPEC).

The Minister of Energy, Jeff Radebe, is expected to intensify engagements with counterparts in the oil producing countries with a view to obtaining favourable terms for crude oil allocations for South Africa.

“From a diplomatic perspective government will sustain engagement with the oil producing countries to call upon them to moderate their stance on oil production cuts as this hurts the global economic growth prospects, and in particular is detrimental to all developing countries," the Economic Cluster said.

Government said it remains gravely concerned about the negative impact that global geopolitical developments, including trade spats between the US and its major trading partners, are having on the currencies of emerging markets including the Rand/Dollar exchange rate.

“Government has noted with concern the growing debate about the need to tamper with the Fuel Levy and the Road Accident Fund. Government wishes to remind stakeholders that all economies of our size that do not produce oil, levy a tax on fuel as one of the most efficient instruments of raising revenue for governments worldwide - including South Africa,” the Economic Cluster said.

The revenue is used for the compensation of victims of vehicle accidents, the improvement of the road infrastructure as well as other societal needs.

“And it is for this reason that a direct comparison of fuel pricing within the region is not possible, as our developmental taxation system is not the same as those of our regional counterparts. The government wishes to call upon all sectors to be circumspect prior to increasing prices as a result of the prevailing fuel prices,” it said.

Government has encouraged retailers and food processers to take into consideration the negative impact that the increases on products will have on the most vulnerable. 

“Going forward on a policy level, South Africa needs to ensure that the framework for the exploration and production of oil and gas is finalised through the Minerals and Petroleum Resources Development Act (MPRDA) in the short term. This will encourage oil and gas exploration on the territorial waters of the country, which in the long run will benefit oil and gas consumers,” the statement said.

Motorists are also advised to use all possible opportunities to contain the cost of petrol.

“Among the actions that we can take is to moderate our driving habits as motorists. Ensure correct tyre pressure, balancing and wheel alignment. Plan and combine of trips to avoid unnecessary journeys. Drive at lower than the speed limit,” the Economic Cluster said. – SAnews.gov.za