Concerns raised around South Africa’s new petrol price cap

The South African Petroleum Retailers Association (SAPRA) has warned that further discussions are needed before decisions can be made on the best way forward for petrol price relief for consumers.

This follows confirmation by Energy minister, Jeff Radebe, that government would finalise the proposal to cap the price of 93 octane petrol by the end of January 2019.

Vishal Premlall, director of SAPRA, says it has been approached by Government for comment on the proposed publication of maximum retail prices for 93 Octane grades, and has appealed for an extension on the required date for comment.

“We are concerned that the timeline allotted to give input will not enable fair and reasonable consultation with all affected stakeholders,” he said.

He added that a proposal of this magnitude, coupled with current market conditions including low demand, margin under-recovery and continuing rising costs, could result in job losses.

“There needs to be clarity on items such as price competition between retailers, the next steps once the proposal goes ahead, and how new entrants to the market will be affected, amongst others.

“We believe the only way to gain clarity will be through intensive impact analysis conducted by an independent company and input from all stakeholders.”

He reiterated that while the association supports Government’s attempts to lower the ever-increasing fuel price that has impacted cash-strapped consumers, the attempt to bring price relief for the consumer needs to be explored in further detail

“Deferring this responsibility to the retailer is, however, not going to yield the significant results needed to bring about consumer relief.

“Rather a full analysis of the basic fuel price needs to be explored,” he said.

Read: Expect a massive petrol price drop in December

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Concerns raised around South Africa’s new petrol price cap