A windfall fuel tax won’t benefit motorists — or Sasol, according to the petrochemicals group.
In its submission to the National Treasury task team appointed to assess possible reforms to the fiscal regime applicable to windfall profits in South Africa’s liquid-fuel energy sector, Sasol says it believes that the price-mitigating effect of a windfall tax, if imposed, would be minimal and would not solve the problem of high fuel prices.
In fact, it might cause the South African motorist to become more exposed to supply interruptions, it asserts.
The petrochemicals group says it recognises that because of its size, technology and history it is entrusted with a special responsibility regarding the role the company should play in the development of South Africa as a country, as well as in relation to the consumer.
“We are intent on discharging this responsibility having full regard to the interests of our country, our shareholders and our customers. We are deeply committed to South Africa, and will continue our very substantial investment, employment and wealth creation to the benefit of many thousands of our fellow citizens,” it says.
However, it adds that it is Sasol’s sincere belief that windfall taxes would impede the group’s ability to discharge this responsibility.
“We are also very aware of the plight of the consumer, who has had to bear the brunt of recent high fuel prices. In a price-regulated environment, with global uncertainty and supply disruptions creating historically high oil prices, the price of fuel becomes an emotive issue. It is our sincere belief that the price-mitigating effect of a windfall tax, if imposed, will be minimal.
“It will not solve the problem of high fuel prices. In fact, it may cause the South African motorist to become more exposed to supply interruptions,” it asserts.
But Sasol believes that as the South African economy accelerates its growth rate, with greater demands made on the secure supply of fuel, the time is right for a dialogue with all stakeholders, including consumer groups, to understand how South Africa’s fuel needs will be addressed in future.
“Sasol welcomes the opportunity for public consultation on the possible introduction of windfall taxes on companies in the liquid-fuels industry and, in particular, in the synthetic-fuels industry, as this will afford all parties an opportunity to provide input into an issue of great importance for our industry and country.
“It is appropriate that transparency and public scrutiny are brought to bear on an industry that has in the past been characterised by secrecy and a lack of public involvement. It should, however, be pointed out that any debate on the concept of windfall tax should not be confined to a particular industry only,” it added. — I-Net Bridge