Call for sustainable solution to mitigate fuel hikes

THE Automobile Association of South Africa (AA) says citizens will continue to be at the mercy of fuel price hikes until a more sustainable solution to mitigate these these costs is sought.

The AA was commenting on unaudited data from the Central Energy Fund (CEF), which indicates a substantial fuel price decrease this month.

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According to the CEF’s figures, 95 unleaded petrol is expected to drop by R2.35 per litre, while 93 unleaded petrol will be lower by R2.18 per litre.

Diesel is expected to drop by between 77 and 87 cents per litre, and illuminating paraffin by around 82 cents per litre.

AA spokesperson Leyton Beard said, although this is a welcome relief for motorists, the price of fuel is still higher than January levels.

“These decreases are certainly welcome and will provide some relief to motorists. Considering the expected decrease to ULP95, for instance, the price of this fuel will drop from its current R25.42/l to R23.07/l.

“This is cheaper than the June price of R24.17/l but still significantly higher than the R21.84/l May pricing. It is also way off the January pricing of R19.61/l. Nevertheless, any decrease to fuel prices is good news,” said Beard.

International product prices, mainly oil, have been credited as the main driver behind the expected decreases, contributing 94% to the projected reductions.

“Although we expect fuel to be cheaper in September, we remain concerned about the overall high prices which impact all consumers.

“The price hikes in June and July will continue to impact the economy, and on the financial situation of all South Africans,” said Beard.

The association has further called on government to urgently initiate a transparent review of the fuel price, adding that scrapping the General Fuel Levy (GFL) is not the solution.

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“We note the calls by those who say this is a way of reducing the fuel price but in our view, this will not solve the problem, it will simply force government to find alternative ways to collect the revenue generated by this tax.

“Instead, the structure and composition of the fuel price must be considered, along with a deeper interrogation of how government currently allocates its funds.”

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