Finance minister Enoch Godongwana says the government is in talks to cushion the impact of record petrol price hikes in South Africa over the coming months.
Responding to oral questions in parliament on Wednesday (23 March), Godongwana said that this intervention would likely be temporary, with the National Treasury and Department of Mineral Resources and Energy (DMRE) also considering long-term options to help alleviate fuel prices.
Godongwana did not specify what exact measures would be introduced as the discussions are private and still ongoing.
“Work is being done in this regard. What is making the matter more urgent is the impact of the Russia-Ukraine conflict which is moving the price of oil faster than we have thought.
“The work we are doing is intended to address the immediate challenge we are facing, and a decision will be announced fairly soon.”
He added that it is the intention of the government to take some ‘urgent steps’ for April and May specifically.
“I can’t reveal the details at this stage as we are in a sensitive discussion with the DMRE. Clearly, there is an intention on the part of the government to make immediate steps in particular for April and May. (This will) mitigate the impact of the price increases, even as a temporary measure, for those two months.”
A longer-term review, which will include considerations around the basic fuel price, will aim to make the price of petrol in the country more affordable going forward, Godongwana. However, he noted that this was a separate issue from the urgent intervention measures his department is currently deliberating.
The latest data from the Central Energy Fund (CEF) shows South Africa is on track for a petrol price hike of between R1.85 and R1.93/lite in April. The diesel price is expected to increase by as much as R3/litre.
In a presentation to parliament on Tuesday (15 March), the Department of Mineral Resources and Energy said that increases of R2/litre should be expected over the coming period, with developing economies such as South Africa likely to see diminished economic growth.
If the situation deteriorates further, the department confirmed that it will consider introducing fuel limits – including restrictions on how many litres each motorist are allowed per visit.
It provided the example of a motorist being limited to 50 litres of fuel per petrol station visit. However, it said that this would largely be a ‘worst-case scenario’ and that the situation will hopefully be avoidable as diplomatic efforts between Russia and Ukraine continue.