Government gives fuel price hike ‘special consideration’
Minister in the Presidency Mondli Gungubele has confirmed government is deliberating on how best to ease the burden on citizens as fuel hikes loom, saying the matter was receiving special consideration.
He alluded to a resolution being reached soon, reports Fin24.
‘Whether the government will intervene again and ensure that fuel prices remain reasonable as it’s a matter that affects the entire country is receiving special consideration because it affects our economy very strongly,’ said Gungubele.
With the hopes that global energy prices would stabilise by the end of May, government introduced a temporary 40% reduction in the duty imposed on each litre of fuel for April and May.
The hope was that the two months would create enough of a buffer for local petrol prices to reduce at a more normalised rate.
Meanwhile, the DA has proposed that government scrap the general fuel levy and deregulates the fuel sector.
A huge fuel price hike is expected in June which will see motorists paying more than R25/litre, reports TimesLIVE.
The general fuel levy is R3.93/litre which DA leader John Steenhuisen yesterday said was little more than a ‘corruption tax’.
He said road users were effectively reimbursing National Treasury for taxpayer funds lost to corruption and wasteful expenditure. He added that the general fuel levy of R3.93/litre can be scrapped entirely if government cut wasteful expenditure on luxuries like catering and entertainment, VIP protection and vehicles, and by uprooting state capture corruption.
Fuel is expected to increase by between R1.93/litre and R1.97/litre in June. However, with the fuel levy reprieve of R1.50/litre coming to an end in May, the increase will be about R3.50/litre unless government extends the temporary relief.
Steenhuisen said the cost of fuel could be further reduced by deregulating the fuel sector to allow competition between sellers.
In a market of 11bn litres a year, competition among sellers would ‘naturally drive down prices as they compete for business’.
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