State says fuel price increase out of its hands

The department of energy has stressed the recent drastic increase in fuel prices is out of the government’s hands and has urged South Africans to be more fuel efficient.

At a press briefing in Pretoria on Tuesday, Minister of Energy Dipuo Peters explained the factors that have contributed to an increase of 73c per litre, which comes into effect at midnight on Tuesday.

Peters acknowledged that increases were impacting negatively on all South Africans. “While the department is committed to fulfilling its mandate of ensuring that energy is accessible to consumers at the lowest possible costs, it is not within the powers of government to dictate market fuel prices,” Peters said.

“Rather, fuel prices are set in line with global market issues such as geopolitics, currency strengths, and speculator activity. South Africa is a price taker.”

Peters said there were several factors working against the global oil price:


  • A stronger global economy has pushed risk markets, including commodities like oil, higher;
  • The introduction of the Iranian oil sanctions and the risk of an Israeli attack on Iran’s nuclear facility;
  • Increasing attacks on oil infrastructure in Iraq after the withdrawal of US troops;
  • The Japanese oil use for power generation has been increasing significantly since the March 2011 earthquake and the subsequent shutdown of their nuclear reactors; and
  • The closures of refineries in the US east coast, the largest regional petrol market in the US, has led to increased reliance on imports from Europe, thus impacting on the Mediterranean prices that contribute 50% to the basic fuel price.

But locally, several other costs have pushed the petrol price upwards.

Minister of Finance Pravin Gordhan, in his budget speech in February, announced the fuel levy and the road accident fund levy on petrol and diesel will increase by 20c per litre and 8c per litre, respectively, with effect from April 4.

Revised pipeline and road transport tariffs are also implemented into the price structures of petrol, diesel and illuminating paraffin with effect from April 4. The pipeline transport tariffs are set by the National Energy Regulator of South Africa and the road transport tariffs were set in line with the vehicle costs schedule of the Road Freight Association.

On the upside, the average Rand/Dollar exchange rate strengthened when compared to the previous period and decreased the contribution to the basic fuels price on petrol, diesel and illuminating paraffin by at least 5c per litre.

Peters said motorists would not be the only ones to suffer. “The impact of the increasing pump prices for fuel inevitably has a spiral effect that leads to increases in the price of other commodities such as food which is transported to consumers by road, rail or air.”

Peters urged South Africans to be more fuel efficient by carefully planning their trips, avoiding speeding, and using public transport whenever it is practically possible. Lift clubs, she said, can also go a long way in reducing the transportation costs for individuals.

Subscribe to the M&G

These are unprecedented times, and the role of media to tell and record the story of South Africa as it develops is more important than ever.

The Mail & Guardian is a proud news publisher with roots stretching back 35 years, and we’ve survived right from day one thanks to the support of readers who value fiercely independent journalism that is beholden to no-one. To help us continue for another 35 future years with the same proud values, please consider taking out a subscription.

Related stories

Brace for big fuel price increase on Wednesday

The fuel price announcement for March was made by Minister of Energy, Jeff Radebe, on Monday morning

Mnangagwa returns to Zimbabwe after protest crackdown

Police and soldiers launched a large-scale operation against suspected protesters last week, which was triggered by a rise in fuel prices

A Zimbabwean’s flight into exile: A voice inside me said ‘Run’

Fearing for her life, outspoken commentator Thandekile Moyo fled Zimbabwe this week with little more than the change in her pocket

​Five dead, dozens injured as protests prompt brutal crackdown in Zimbabwe

The protests began on Monday after President Emmerson Mnangagwa had announced a hike in fuel prices by up to 150%

Haemorrhaging RAF staggers along

A new model is in the pipeline but the current fund’s liabilities are projected to rise to R393-billion by 2021-2022

Petrol price unchanged, but increases in other fuels

Illuminating paraffin will increase 28 c/l increase and single maximum national retail price for illuminating paraffin will increase 37 c/l
Advertising

Subscribers only

Toxic power struggle hits public works

With infighting and allegations of corruption and poor planning, the department’s top management looks like a scene from ‘Survivor’

Free State branches gun for Ace

Parts of the provincial ANC will target their former premier, Magashule, and the Free State PEC in a rolling mass action campaign

More top stories

Q&A Sessions: ‘My north star is the patient’

Rhulani Nhlaniki is Pfizer’s cluster lead for sub-Saharan Africa. As Pfizer starts phase III of the clinical trial of their Covid-19 vaccine candidate, he tells Malaikah Bophela that if it is successful, the company will ensure the vaccine will be available to everyone who needs it

Ghost fishing gear an ‘immortal menace’ in oceans

Lost and illegal tackle is threatening marine life and the lives of people making a living from the sea

In terms of future-telling failures, this is a Major One

Bushiri knows how to pull a crowd. Ace knows a ponzi scheme. Paddy Harper predicts that a new prophet may profit at Luthuli House

Facebook, Instagram indiscriminately flag #EndSars posts as fake news

Fact-checking is appropriate but the platforms’ scattershot approach has resulted in genuine information and messages about Nigerians’ protest against police brutality being silenced
Advertising

press releases

Loading latest Press Releases…

The best local and international journalism

handpicked and in your inbox every weekday