Petrol increase could have been avoided

The Democratic Alliance believes the most recent petrol price increase set for Wednesday  September 5, could have been avoided if the Department of Energy had adjusted the petrol pricing formula.

On Wednesday the petrol price will increase by 93 cents per litre, with diesel set to increase by 69 cents.

Lance Greyling MP, DA shadow minister of energy, noted that most South Africans can ill-afford this increase. “Petrol can be much more affordable if government taxes and levies are reduced to a minimum, and the basic fuel price reflects oil supply fundamentals over the long term,” he said in a press statement.

The DA pointed out that the Department of Energy has admitted that the latest price hike is partly the result of a new “retail margin” in the petrol pump price formula. “Such a unilateral decision is undemocratic at best, and economically senseless at worst,” Greyling said.

He said that the new “retail margi”’ was purportedly agreed to at the Motor Industry Bargaining Council in September 2010. However, its inclusion in the already-controversial petrol pump price formula has not yet been discussed in Parliament.

“I will be tabling a motion for debate on this issue, placing it in the broader context of how government plans to deal with increasing future oil prices,” the shadow minister said.

The DA noted that the basic fuel price is driven by the international oil price, which fails to reflect supply fundamentals and local conditions. A number of other levies and taxes are then added to arrive at the petrol price.

These included the road accident fund levy, and now a new subsidy for paying “wages of service-station pump attendants and cashiers”, the political party said.

“While the DA is strongly in favour of improved working conditions and pay for these workers, the mechanisms by which it happens must first be debated in parliament. This would also serve to provide surety that any agreed subsidy actually reaches its intended recipients,” the party said.

“Such ill-conceived policies will simply add a further cost burden to South Africans who are already under pressure just to survive. The Department of Energy must urgently consider our proposals to adjust the petrol pricing formula and relieve some of the pressure,” Greyling concluded.

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Petrol increase could have been avoided