Organisation Fears Government Could Stop Major Petrol Price Drop In August

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South African motorists saw the price of petrol increase by more than R6 per litre over the course of 2022. However, they may soon receive some relief as early indicators suggest the fuel price will decrease in September 2022.

 


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In July 2022, the price of petrol climbed to R26,74c per litre. This was the highest ever recorded in South Africa. However, the price dropped to R24,99c per litre in August and could decline by as much as R2,60c per litre in September 2022.

This major fuel price decrease is anticipated as the price of oil dropped to $91.50 during the first half of August. In addition, the rand has strengthened by around 2% against the US dollar for the same period.

However, the Organisation Undoing Tax Abuse (Outa) is concerned that the Finance Minister Enoch Godongwana could increase the fuel levy which would result in a smaller decrease in the price of fuel.

Outa CEO Wayne Duvenage says they fear that Minister Godongwana will increase the fuel levy by 25c to 30c per litre to raise additional revenue to cover the Gauteng freeway improvement bond. A 25c per litre increase to the fuel levy would result in approximately R5.5 billion in revenue for the government per year. 

“Should this happen, Outa will denounce this decision on the basis that the fuel levy has already been increased in excess of R2,50c per litre since the Gauteng freeway upgrade began in 2008," declared Duvenage.

He added that government failed to take up Outa’s suggestion of a ring-fenced 10c per litre increase to the fuel levy eleven years ago. If the government had taken their suggestion, they believe the freeway bonds would have been settled.

It is important to note that the current fuel price drop prediction is based on mid-month data and that may change as the month progresses. 

 

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