Push to ‘deregulate’ South Africa’s petrol price

Trade union Solidarity has called on the government to ‘deregulate’ South Africa’s petrol price by making changes to the country’s existing fuel levies.

The union referred to September’s headline inflation rate published by Statistics South Africa on Wednesday (20 October), which saw a further increase as fuel prices climbed in the country.

“The inflation rate of 5% is once again much higher than what consumers have become accustomed to over the past few years. With a rate of 7%, food price inflation is also higher than general inflation,” it said.

“Electricity and other household fuels have risen by a staggering 14% in the past year. The worst is vehicle fuel inflation, which has risen 19,9% in the past year. On top of that, further huge increases in the fuel price have been announced for next month.”

Solidarity said it is crucial that the tax on fuel should be reduced immediately and that the price of petrol should also be deregulated, as in the case of the diesel price. Competition in the petrol market will benefit everyone.

“Fuel price inflation seeps through to almost every other product in the inflation basket, and therefore it should be the very first place where the government can make a difference. As with almost all government interventions, its efforts to regulate the industry are to the detriment of everyone in South Africa.”

Trade federation Cosatu has also called for changes to South Africa’s fuel price, including introducing a petrol price cap. Cosatu is the largest trade federation in the country, with an estimated membership of 1.8 million workers.

“Currently, increasing the fuel levy only serves to feed a bankrupt Road Accident Fund that has been mismanaged into the ground. The RAF’s deficit of almost R300 billion is the greatest threat to the fiscus after Eskom’s debt burden.

“We are also still waiting on the government to release the research report that was conducted by the department of energy looking into the possibility of a fuel price cap,” the federation said in August.

Current estimates show that around 40% of the petrol price goes to some form of government taxation. Commenting on the fuel price increases for April, the Automobile Association said that, given the weaker rand and rising oil prices, fuel taxes are where the government has the most ‘wriggle room’ to intervene on price hikes.

Read: The ‘extra’ levy that South African motorists are paying at the petrol pumps

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Push to ‘deregulate’ South Africa’s petrol price