Fuel price increase adds another nail in the economic coffin
According to current data, the movement in international petroleum prices is the main driver behind these increases.
The Department of Mineral Resources and Energy announced a R2.57 increase to 95ULP petrol in Gauteng, which will push the cost of this fuel to R26.74, while the increase of R2.37 to 93ULP pushes this fuel price to R26.31.
“In addition to the increases to the basic fuel prices, the R1.50 relief off the General Fuel Levy given by the Government for May and June, was halved for July, which adds to the increases. This means the increase of R1.82 to 95ULP is, effectively, an increase of R2.57. This and other increases announced will certainly negatively impact on all South Africans and will undoubtedly play a big role in the economy going forward,” observed the AA.
The value of the rand appreciated on average against the US dollar in June, resulting in a saving of around 20c per litre, without which the basic increases would be higher.
“We understand that government has little leeway in terms of international petroleum prices and the rand/US dollar exchange rate, which is why we have called and will continue to press, for a review of the fuel price, an area where the government has control over the fuel price. There is a need to interrogate all the components of the fuel price, to determine whether all these components are still necessary in the existing formula, and to establish if the current calculations of these components are correct. The longer this review is not initiated, the longer the country will wait for lasting solutions,” noted the association.
Source: AA
