Parliament will hold a debate on South Africa\u2019s record petrol price increases on Wednesday (15 June) following an official request by the opposition Democratic Alliance.<\/p>\n
The discussions are set to focus on the country\u2019s record petrol price hikes and possible interventions to structurally change how the basic fuel price is calculated.<\/p>\n
Discussions around petrol prices in South Africa have ramped up in recent months as global oil prices have soared on the back of the Ukraine-Russia war. This has been exacerbated by an inconsistent rand.<\/p>\n
Several parties have since submitted proposals on how to cut the petrol price over the long-term – including the government itself.<\/p>\n
Government proposals\u00a0<\/strong><\/p>\n The National Treasury detailed its official proposals to tackle South Africa\u2019s record-high petrol prices in March ahead of the announcement that it would be scrapping the fuel levy over the short-term.<\/p>\n In a presentation to parliament on 15 March, Treasury said that it had narrowed down its proposals to four options, with a combination of these proposals likely to be the most effective:<\/p>\n These proposals are the most likely to gain traction in South Africa going forward as they have received support from the ruling ANC and government lawmakers.<\/p>\n DA calls for deregulation\u00a0<\/strong><\/p>\n The Democratic Alliance has announced plans to introduce a new private members bill to parliament that will de-regulate the fuel sector.<\/p>\n The opposition party said the focus of the bill will be to amend the existing Petroleum Products Act \u2013 specifically provisions in section 2 of the legislation which deals with the regulation of the fuel sector by the minister of energy.<\/p>\n \u201cThe DA will also ensure that the Competition Commission will keep a close eye on the market and to ensure that price gouging does not occur, particularly in rural and small towns where competition may not be fully developed. This will ensure that in regions where competition may be low, fuel prices may not exceed an unreasonably high level,\u201d said the party\u2019s Kevin Mileham.<\/p>\n \u201cWhen the industry is de-regulated, competition among wholesalers and retailers will be increased. This should result in lower pricing at the pump as retailers will be allowed to compete on price to attract customers, which would be a great relief for South African motorists.\u201d<\/p>\n Unions also want deregulation – but fuel retailers don’t want a ceiling<\/strong><\/p>\n The Congress of South Africa Trade Unions (Cosatu) has also called on the government to extend its fuel price tax relief beyond July and consider deregulation as a long-term option.<\/p>\n “There is an urgent need to deregulate the fuel price to allow competition, and the re-submission of the Road Accident Fund and Road Accident Benefit Scheme Bills at parliament to place the Road Accident Fund on a more sustainable financial path and lessen the need for it be bailed out through fuel levy hikes.\u201d<\/p>\n The Fuel Retailers Association however has cautioned against a proposal to \u2018deregulate\u2019 the country\u2019s fuel price.<\/p>\n Deregulation is expected to allow retailers to compete on price and offer motorists discounts and special offers to fill up at their stations. However, the association warned that the change could have to opposite effect of promoting competition, and ultimately set the country\u2019s fuel sector back decades.<\/p>\n The association\u2019s chief executive Reggie Sibiya said the move will effectively destroy the transformation of the sector and prevent the emergence of new fuel retailers.<\/p>\n Sibiya said that fewer than 20% of the country\u2019s petrol stations are owned by black South Africans, and a move to cut fuel margins further would hit these owners the hardest.<\/p>\n He added that the planned proposal did not amount to \u2018full deregulation\u2019 which would allow the country\u2019s petrol stations to set any price they want for fuel. Instead, the move to introduce a petrol price ceiling was the worst form of regulation and akin to a \u2018nazi regime\u2019 as it does not take into account all of the additional margin costs that fuel retailers have to pay, Sibiya said.<\/p>\n \u201cIt\u2019s a killer\u00a0 \u2013 you want to kill businesses this is what is being proposed here. We did say in a 2018 proposal that this is not going to work and we are surprised that it is being introduced now in an opportunistic way, taking advantage of rising fuel prices.\u201d<\/p>\n AA wants a full review\u00a0<\/strong><\/p>\n The Automobile Association (AA) of South Africa has called for a general review of how the country’s petrol price is calculated – including the incorporation of taxes.<\/p>\n “Government must now initiate a review of the fuel price: to examine all the components that comprise a litre of fuel, establish their continued relevance as part of the fuel price, and to determine if the calculations used are still correct,” it said.<\/p>\n “Such a review is long overdue and the longer government delays getting this started, the longer it will take to find sustainable solutions.”<\/p>\n\n
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