Government intervention brings shock petrol price announcement

There will be no petrol price increase in September, according to the Department of Energy, thanks to an “urgent” temporary  fuel price intervention measure.

The only increase that will be factored into the price for September is a retail margin increase of 4.9 c/l to be effected in the retail price structures of all octane grades from 05 September 2018. This increase is necessary to accommodate the wage increases of pump attendants, cashiers and administrative staff at service stations.

According to minister of energy, Jeff Radebe, the intervention is a once-off, and the step was taken because South Africans have seen sustained increases for the past five months.

“Despite the fact that these increases were caused mainly by international factors, the department has decided to intervene temporarily for this month,” he said.

According to data published by the Central Energy Fund in late August, had petrol prices increased without intervention, prices could have gone up by another 25 cents per litre.

Public enterprise minister Pravin Gordhan warned Parliament that the bulk of state owned entities within his portfolio would suffer as a result of any further fuel hikes, Fin24 reported.

In a reply sent to Members of Parliament last week, Gordhan said that any increase would hamper the turnaround strategies of state-owned companies.

“Implications of fuel price increases to the turnaround plan are that targeted areas of cost reduction would be squeezed to provide further savings, since the fuel cost increases would erode these savings,” he said.

Deputy president David Mabuza said last week that government is exploring solutions to address the high costs of fuel.

As several organisations across the sectors of the economy continue to call for action to deal with escalating fuel prices, Mabuza said fuel prices continue to be a concern for government.

“Between July 2017 and July 2018, the fuel price increased by 25.2%, leading in part to a 10% increase in the cost of transport.

“Fuel prices have been driven by higher global oil prices and a weaker rand,” he said.

Radebe also briefed members of the Portfolio Committee on Energy at a meeting last week, telling them that government was using several avenues in a bid to lower the cost of fuel, among others, negotiating with crude-oil producing countries to obtain pricing regimes that are favourable to developing economies.

Here are the official prices for September, taking into account the five cents increase.

Fuel August official September official
95 Petrol R16.03 R16.08
93 Petrol R15.82 R15.87
0.05% Diesel (wholesale) R14.41 R14.41

Read: Motorists can expect more petrol price hikes thanks to the rand

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Government intervention brings shock petrol price announcement