The South African government is looking into ways of cushioning the anticipated price rises for petrol and diesel in June, Minister of Science and Technology Mosibudi Mangena said on Friday.
Briefing the media in Parliament, Mangena said an announcement on the possible subsidy will be made on Monday. Given the sharp increases in the global price of oil, the retail price of petrol will need to rise by 38 cents a litre on June 2 and the wholesale price for diesel (0,3% sulphur) will need to rise by 30 cents a litre. The wholesale price increase of illuminating paraffin will be 42 cents a litre.
“Future oil and refined petroleum prices are extremely difficult to predict, but government will continue to monitor these prices and consider whatever means to soften the impacts for the consumer,” the minister said.
“It should be noted that consumers will nevertheless be faced with substantial fuel prices. Consumer and especially motorists are therefore advised to acquaint themselves with fuel-saving tips and use fuel as efficiently as possible.”
Elaborating on the issue, Deputy Minister of Minerals and Energy Lulu Xingwana said that the petrol tax was used before to cushion future price rises, but that the Equalisation Fund, which houses the taxes, is “facing a crisis” — it will be exhausted if the petrol price continues to rise.
Stockpiling extra oil supplies when energy prices were lower is also a strategy used by the government, but this, too, is not inexhaustible.
“As things stand now we can’t depend on a stockpile or the equalisation fund,” she said. “The crucial question is that Opec is not willing to increase its oil supplies and the security situation in the Middle East. These are out of our control.”
She added that Minister of Minerals and Energy Phumzile Mlambo-Ngcuka and Minister of Finance Trevor Manuel will be discussing the issue of subsidising June’s price increases over the weekend, once Mlambo-Ngcuka returns from overseas.
“We are hoping to finalise discussions with the finance minister by Monday. Something may come out of them, but perhaps not immediately,” she noted. “We will also be involving the governor of the Reserve Bank and the minister of trade and industry in the discussions.” — I-Net Bridge