The Democratic Alliance has proposed six measures the government should take to reduce the ever increasing fuel price.
”Government can and should take proactive steps to decrease the price of petrol,” DA MP and minerals and energy spokesperson Hendrik Schmidt told a media briefing at Parliament on Tuesday.
”Instead of simply reacting to the increasing price of crude oil, by upping the price of petrol, the DA believes there are six practical steps the department of minerals and energy could take to bring down the high price of fuel,” he said.
The price of petrol was set to increase by 29 cents a litre from midnight on Tuesday, bringing it to a new record high of R5,91 at inland pumps.
Analysts have predicted that the price will increase by a further 30 cents at the beginning of October.
The DA proposed a super tax on Sasol’s profits and the proceeds be used to finance a reduction in the fuel tax to the order of 15c to 20c a litre.
Sasol received state support when the price of crude oil was low, on the condition that it made concessions should the price of crude recover. It had now recovered and Sasol should be taxed on its profits, Schmidt said.
The government also needed to kick-start the biofuels industry by providing tax breaks over and above those currently offered.
”At the moment, biofuels producers are able to write off capital equipment according to the same formula applicable for all agricultural equipment — 50% in the first year, 30 in the second year and 20% in the third year.
”This formula should be adjusted to 60:50:40, or a total 150% tax write off.”
In addition, the government should deregulate by allowing retailers to discount the price of petrol if they so wished, said Schmidt.
”The retail and wholesale margins on petrol stand at about 80 cents per litre. We believe that deregulation can significantly reduce the size of these margins.”
Tax cuts should also be considered, said Schmidt. When the international price of crude oil was unusually high, it was appropriate for the government to consider reducing the fuel tax.
An administrative shake up of the Road Accident Fund, which accounted for about 31,5 cents of the price of a litre of petrol, would also allow for a small reduction in the price of petrol.
Finally, the government should reward good behaviour, said Schmidt. The government should reduce VAT and/or import duties on cars that had a fuel
efficiency of above 15 km/l.
This would include expensive cars, such as those that used hybrid technology to achieve efficiencies of above 20 km/l, but many affordable small cars and contemporary diesel vehicles would also qualify, Schmidt said. – Sapa