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Parly committee calls for long-term fix to soften the blow of fuel price hikes

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Parly committee calls for long-term fix to soften the blow of fuel price hikes

Petrol pump
Photo by Bloomberg

2nd June 2022

By: News24Wire

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Parliament's Portfolio Committee on Mineral Resources and Energy has called on the government to undertake a "comprehensive review" of South Africa's fuel pricing regime.

This comes after the National Treasury stepped in to provide relief to South African motorists ahead of this week's fuel price adjustment by extending a cut to the general fuel levy of R1.50 per litre.

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While there was still a R2.43 hike to the price of fuel on Wednesday, the price would have been hiked by almost R4 without the extension. The relief is set to last from the beginning of June to early July, after which the adjustment will be dialled back to 75 cents per litre until early August.

Portfolio Committee on Mineral Resources and Energy chair Sahlulele Luzipo said in a statement that with the government's relief expected to be withdrawn in two months, a sustainable plan should be developed for long-term relief.

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"We need to ask ourselves a pertinent question as to what will happen after two months when the fuel price is still high. A piecemeal review is unsustainable, in our view," said Luzipo.

Luzipo suggested that the government should consider placing domestic taxes "elsewhere", other than on the general fuel price. 

So far, the government has scrapped a levy of 10c per litre that has been applied to inland 95-octane unleaded petrol, and it has also proposed that the basic fuel price be decreased by 3c per litre in the coming months.

According the the Department of Mineral Resources and Energy and the National Treasury, the extension to the cut in the general fuel levy caused the government to forego an estimated R4.5-billion in revenue.

On Wednesday, diesel prices rose by R1.10 per and paraffin rose by R1.56.

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