Issued by: Department of Transport
PRESS STATEMENT BY MINISTER MAC MAHARAJ ON FUEL PRICING
This written statement services to both clarify and confirm my verbal statement on Sunday 23 June in Newcastle.
Most countries in the world have a price differential of approximately 40% between their price of Diesel - considered an economic fuel because it is used by most vehicles conducting public and goods freight transport and Petrol - considered a Luxury fuel as it is used mainly for private transport. This differential serves to ensure that economic input costs remain lower and make the economy competitive.
In Zimbabwe - Petrol is approximately R1,75 a litre while Diesel is R1,38 a litre. This differential plus the fact that Diesel in SA is approximately R2,00 a litre results in many road freight vehicles travelling North (and increasing numbers do) enlargening their tanks and only filling on the other side of the border - losing us turnover and government revenue.
In South Africa we do not have such a differential, in fact we did have a situation early in the year when Diesel was more expensive than Petrol. Such a differential is not easily implementable in South Africa because the Taxi industry which supplies 50% of public transport uses Petrol.
If we were able to move the taxi industry into using Diesel, then all economic activity conducted by ships, trains, trucks, buses and taxi's would be using Diesel and it could be targeted for a lower price - contributing to lowering input costs and making our economy more competitive.
My proposal that South Africa consider such a differential is to bring us in line with most of the world, but can only be done after the taxi industry issue has been addressed, and even then it will need to be introduced in an incremental way.
Issued by Mac Maharaj
For further information - contact Ketso Gordhan, Director General - Department of Transport on 012-2902001. June 24 1996