Energy minister’s remarks point to upcoming fuel price hike

Energy minister’s remarks point to upcoming fuel price hike

Jeff Radebe (File, Sapa)

Jeff Radebe (File, Sapa)

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Minister of Energy Jeff Radebe told Parliament’s oversight committee on energy on Tuesday that difficulties beyond the government’s control look set to inform the fuel price announcement due at the end of the week.

His remarks strongly point towards a fuel price hike for motorists. The final fuel price announcement for March will be made at the end of the week or over the weekend. 

New prices generally come into effect on the first Wednesday of a new month. 

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“Opec (the Organisation of the Petroleum Exporting Countries) and other geopolitical events will influence our liquid fuel price in our country. Substantial amounts of crude oil have been removed from the market and this has impacted negatively on the price of petrol and diesel that we will pronounce next week,” said Radebe.

The Automobile Association announced in mid-February that the price of petrol looked set to increase by 43 cents per litre in March, based on unaudited mid-month fuel price data. 

Fuel price cap? 

When fuel prices reached all-time highs in 2018, the department of energy said it would conduct research into the feasibility of instituting fuel price cap.

Radebe did not comment on this research on Tuesday, nor say how close the department is to concluding it. Minister of Finance Tito Mboweni, meanwhile, did not mention in cap either in his maiden Budget.

Deputy director general for petroleum and petroleum products regulation at the Department of Energy, Tseliso Maqubela, later said on the sidelines of the meeting that research into the feasibility of a fuel price cap was not yet finished.

The department has also not responded to questions from Fin24 about the cap. 

READ: No increases in income tax rates or VAT; sin taxes and fuel levies to rise

While Mboweni announced various hikes to fuel taxes, as well as the imposition of a new carbon tax on fuel in his Budget speech, these tax increased will not be levied yet in March. 

They include: 

the introduction of a carbon tax of 9c per litre on petrol and 10c per litre on diesel from June 5;a rise in the general fuel levy of 15c a litre for petrol and diesel from April 3; and a hike in the he Road Accident Fund levy of 5 cents per litre from April 3.

* Update: This article was updated at 13:15 with comment by Tseliso Maqubela.

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