The real reason petrol prices are at record highs

DA leader Mmusi Maimane has indicated that while parts of the rising fuel price are beyond government’s control, it is not doing enough to curb the high rates at which they are rising.

In a column for the Daily Maverick, Maimane said that he knew ‘full well’ that there are many factors that determine the fuel price and that some of them are beyond the control of any government.

“The price you see at the pump includes the cost of crude oil, the cost of refining fuel from this oil, the cost of distributing this fuel to depots and stations, the margins added by filling stations and the two government taxes, the General Fuel Levy and the Road Accident Fund (RAF) Levy,” he said.

“I know that Brent crude oil has increased dramatically in 2018, and I know that our currency has tumbled sharply against the dollar. I have a very realistic view of what can and can’t be done to rein in the fuel price.”

However, he noted that it was disingenuous for government to wash its hands of the effects of the plummeting rand.

“Our currency has weakened by almost 30% since President Cyril Ramaphosa took over, and much of this has been in direct reaction to ANC policy.”

He added that the combined government tax now accounts for almost a third of the price of a tank of petrol or diesel.

And, when measured against rises in the other input costs, this is the portion of the fuel price that has increased more than any other – 165% over the past decade, he said.

“The RAF levy alone increased by more than 300% during this time. Keep in mind that the corruption-plagued RAF’s debt (R29 billion) is fast approaching the total revenue (R37 billion) it received from the fuel levy this past financial year,” he said.

“The General Fuel Levy isn’t a ring-fenced tax either. It simply gets dumped into the fiscus to try to help plug the ever-widening gap between our tax revenue and our expenditure. This is the reason for the extraordinary increases over the years.”

You can read the full column on the Daily Maverick here.


Read: Expect to see petrol price increases into 2019: Dawie Roodt

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The real reason petrol prices are at record highs