Temporary petrol decrease will give motorists ‘time to adjust’

It may only be a R1.50 reduction in petrol levy and while a little may go a long way, people are feeling the burn of rising fuel costs.

Ryann Kriel said she was happy to hear about the decrease in the petrol price.

“But, I am upset that it does not equate to all the petrol hikes we have had the past few months as it has become expensive to travel, affecting our business and ability to buy stock.”

Hendrik Pretorius who travelled on average 200km daily, said the decrease comes as a huge relief.

“I still don’t understand why our petrol is so expensive versus the countries on our borders.”

Pretorius said he spent roughly R450 a day on petrol, while neighbouring countries paid nearly R10 a litre less than South Africans. Faried Plaatjies, who owns a small transport company, said the decrease didn’t help.

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“The price remains expensive. The day the price drops to R10 a litre, I will jump for joy, but for now, it doesn’t make a difference,” he said.

Minerals Resources and Energy Minister Gwede Mantashe said in March SA daily imports about 450 000 barrels of crude oil from Angola, Ghana, Nigeria, Norway, Saudi Arabia and Togo.

On Thursday, Minister of Finance Enoch Godongwana announced a temporary reduction of the general fuel levy (GFL) by R1.50 per litre from Wednesday next week until 31 May.

Godongwana said the decrease will reduce the levy for petrol from R3.85 per litre to R2.35 per litre. The levy on diesel will be reduced from R3.70 per litre to R2.20 per litre.

But there may be some confusion over what the actual costs were. AA spokesperson Layton Beard questioned why the levy prices announced differentiated from the actual prices listed on the Group of Companies. Beard said each litre of petrol was composed of various costs.

“The government adds various levies and taxes on each litre.

“In SA, there were two big taxes added to the composing of the petrol price: the GFL and the Road Accident Fund (RAF) levy.”

Beard said the R3.93 GFL and R2.18 RAF levy per litre added R6.11 to the actual price of fuel per litre.

“The petrol price of 95 unleaded in Gauteng at R21.60 was higher than the R20.88 price at the coast, because the petrol was being transported inland.”

National Treasury hasn’t commented on the price difference in the announcement.

National Taxi Association spokesperson Theo Malele said the association welcomed the temporary relief, but the association urged the minister to consider the decrease in levies on a long-term basis.

“This is going to bring about the necessary relief but will be a short-lived one,” he said.

Organisation Undoing Tax Abuse (Outa) CEO Wayne Duvenage said they would have liked to have seen a greater temporary reduction of the fuel levy – “closer to R3 per litre, but that may have been a bridge too far on the affordability front for the state.”

Duvenage said Outa welcomed the announcement that the Demand Side Management Levy (DSML) component will drop by 10c per litre.

“The government’s decision to introduce a temporary reduction in the fuel levy means the increase will only be about 40c to 50c per litre,” he said.

He said the impact of rising international oil prices due to the war in Ukraine would have taken the price of a litre of 95 octane petrol in Gauteng to about the R23.40 mark from the first Wednesday of April.

Duvenage said the petrol price will only decrease when and if international events placing pressure on the oil price subside and oil returns to about the $60 per barrel mark, and the rand to strengthen somewhat to about R14 to the US dollar.

Economist Mike Schussler said the decrease in petrol prices was better than he expected.

“I didn’t consider the oil reserves at first because I thought we sold them,” he said.

Schussler added that motorists could still expect an increase.

“It will be a small increase. “Petrol should increase by 30c and diesel by R1.60,” he said.

Schussler said the good news was that South Africans could look forward to new prices in two months.

“We will start buying oil from other countries.

“The world oil prices will have to change.

“That’s why I think there will be a much lower petrol price in two months,” he said.

Schussler added that the temporary decrease gave motorists time to adjust.

“If we can make it through the next two months, we will escape the worst,” he said.