The ruling ANC government is to blame for the sky-high petrol prices currently facing South Africans, with another massive hike of between R1.71-2.84 per litre on the cards for September.
This is the view of opposition party Democratic Alliance (DA), which stated that government has ignored all advice from civil rights groups, political incumbents, and even the South African Reserve Bank (SARB), and refused to take urgent policy steps toward fuel price rationalization in the country.
“The impending fuel price increase on Wednesday is a direct consequence of a fuel price framework that no longer serves the interests of consumers but has become an instrument to extract high taxes to fund the ANC’s profligate state,” said DA MP Kevin Mileham.
“Instead of cushioning consumers against the impact of increasingly unaffordable fuel prices, the ANC government has chosen to bury its head in the sand and let consumers face the consequences.”
The state must keep control
Numerous stakeholders with intimate knowledge of fuel price structures have highlighted to government the various areas on which it can focus to regain control of ballooning fuel prices.
Most notably, these include the standardization of taxes, levies, transport, and storage costs in accordance with international best standards, a review of the methodology for calculating retail margins and instating a “maximum” instead of a regulated petrol price, considering the viability of the Road Accident Fund against alternative approaches such as third-party insurance, and removing or updating several outdated elements of the basic fuel price calculation.
In October 2022, the Department of Mineral Resources and Energy (DMRE) showed some willingness and said it would review the fuel pricing structure with a focus on retail margins received by station owners, which are used for operational expenditure and employee wages for over 70,000 South Africans, but almost a year later, nothing has come of this supposed initiative.
“That no action is being taken by the Department of Energy to start the reform process reveals a dogged determination by Minister Gwede Mantashe to retain state control over the fuel value chain,” said Mileham.
“While there is clear evidence that high fuel prices are hurting the economy, pushing consumers to the brink and exacerbating a high cost of living environment, the ANC has adopted an indifferent and cavalier attitude which simply confirms that they do not care about the welfare of consumers.”
A petition with more than 130,000 signatures submitted by the DA to the Ministers of Finance and Mineral Resources and Energy in June 2022, asking them to slash fuel prices through a targeted focus on the general fuel levy, fuel tax reform, and deregulation of the sector, have also fallen on deaf ears.
“While South Africans are struggling to make ends meet with skyrocketing fuel, food, and transport prices, the ANC government has yet to table any viable solutions,” concludes Mileham.
“The South African public simply cannot afford further fuel hikes, nor the resultant price increases on other essential necessities.”
Keyword: Who to blame for South Africa’s sky-high petrol prices