Calls for mercy in South Africa
Civil rights organisation AfriForum has urged the government to provide relief to motorists and the broader economy as South Africa braces for a sharp increase in fuel prices next month.
The organisation has written to the Minister of Finance, Enoch Godongwana, urging him to halt the planned increase in the general fuel levy and instead introduce a temporary tax cut to cushion consumers from the expected surge.
The appeal comes as the latest data from the Central Energy Fund (CEF) indicate significant price pressures are building in the fuel market.
According to the latest figures from the first week of March, both petrol and diesel are showing steep under-recoveries.
Petrol prices are currently showing an under-recovery of around R3.35 per litre—significantly worse than earlier estimates—while diesel prices are under-recovering by roughly R5.80 per litre.
These under-recoveries indicate that fuel prices could rise sharply when the next monthly adjustment takes effect.
Some economists have warned that if these trends continue for the rest of the month, petrol prices could rise far beyond R5.00 per litre.
AfriForum said the looming increases are largely being driven by the escalation of conflict involving Iran, which has dramatically increased oil prices.
The organisation noted that renewed tensions in the Middle East have triggered a global energy shock, with oil prices surging by more than 40% in recent weeks.
Some analysts have warned that prices could climb above $150 per barrel if the conflict intensifies.
AfriForum argues that government intervention is necessary to shield households and businesses from the knock-on effects of higher fuel prices across the economy.
In a letter to the finance minister, AfriForum’s head of public relations, Ernst van Zyl, said the type of relief being proposed has already been used before in times of crisis.
He pointed to measures introduced in 2022 when the government temporarily reduced the general fuel levy by R1.50 per litre.
This was done to help ease pressure on households during the global energy shock triggered by the war between Russia and Ukraine.
“AfriForum, alongside many economists, believe this to be the appropriate approach to cushion the impact of this latest crisis of a similar nature,” Van Zyl said.
He added that fuel price increases have far-reaching consequences throughout the economy because transport costs affect nearly every stage of production and distribution.
“People often underestimate the effect of a fuel price hike on the price of goods,” Van Zyl said.
“Raw materials need to be transported to be turned into intermediate goods. Intermediate goods need to be transported to be turned into final goods.”
“Final goods need to be transported to be sold to consumers. Every step becomes more expensive if the fuel price increases.”
AfriForum’s full letter to the Minister of Finance, Enoch Godongwana, can be viewed below.
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