Government Could Revise How Fuel Price Is Calculated

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Over the past two months, the price of fuel has increased by around R2 per litre. This has resulted in increased calls for the government to revise how the price of fuel is calculated in South Africa.


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Over the past two months, the price of fuel has increased by around R2 per litre. This has resulted in increased calls for the government to revise how the price of fuel is calculated in South Africa.

The price of fuel is determined by a number of different internal and external factors. An example of an external factor is the price of Brent crude oil or the rand to dollar exchange rate. The South African government can't control this. However, different levies, which the government can control, are internal factors that influence the petrol price.

After the most recent increases, Finance Minister Enoch Godongwana called for the calculation of the price of petrol to be revised. The hope is that by evaluating how the petrol price is determined, changes could be made which could see consumers paying less at the pumps.

Parliament’s portfolio committee on Mineral Resources and Energy’s chairperson Sahlulele Luzipo says they have to get as many viewpoints as possible solutions in order to lower the fuel price. He does caution that regulation of the petrol price is an executive authority matter.

One component that makes up the price of fuel is the Road Accident Fund (RAF). The Organisation Undoing Tax Abuse’s (OUTA) Wayne Duvenage has previously questioned why contributions need to be made to the RAF, which is essentially not working. Approximately R2.18c of every litre of fuel that is purchased goes to the RAF.

Luzipho says the committee needs to find a long lasting solution when it comes to how the price of fuel is calculated in South Africa. He adds that the committee set up a meeting immediately after the budget speech where the finance minister made his remarks.

“We've got these proposals that we think will emerge. Remember we have to look whether there is also a need to introduce a legislation or an amendment in legislation. Those are the things that obviously the committee will finalise but we have also convened a meeting where we will look at all the stakeholders to say, can they also assist and bring their own ideas on how to mitigate against the fuel crisis that we are facing as a country” concluded Luzipho.

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