GOOD statement by Brett Herron,
GOOD: Secretary-General & Member of Parliament
31 March 2022
Note to editor: This was the statement made by GOOD Secretary-General and Member of Parliament, Brett Herron, during deliberation on the fuel levy in Parliament today.
The sky-rocketing fuel prices in South Africa are driving inflation, high cost of living and strangling economic growth.
Direct fuel consumers, and those who don’t purchase retail fuel, are under enormous financial pressure as the rapidly increasing cost of fuel is increasing the cost of commuting, increasing the cost of food and driving inflation. Inflation is being managed by raising interest rates adding additional burdens to those who have loans, bonds and other debt.
Regulation of the fuel price has a long history in South Africa and these regulatory powers should be used to be rapidly respond to local and international market dynamics.
It is appropriate that the Ministers have intervened to release the pressure valve and the temporary relief is a welcome intervention.
We welcome every cent that we can save at the fuel pump but what we need is a sustainable solution which doesn’t require us all to fill up our tanks every week.
It would be much better if we could save households hundreds of rand a week by building a functioning public transport network.
The composition of the fuel price at the pump requires a fundamental overhaul so that the cost of fuel is not another factor holding back the economic recovery and growth that we need to generate jobs for all South Africans.
Our government must use its powers to restructure the regulated components – being the margins and the taxes and levies.
In this regard we welcome the announcement that the Minister of Mineral Resources and Energy will be bringing substantial changes to the composition and structure of the fuel price.
The proposed reduction of the basic fuel price by 3c per litre and the termination of the 10c per litre demand side management levy are also welcome steps towards this restructuring. The proposed removal of the price cap and the move to a competitive retail fuel pricing regime would be a significant shift.
South Africa’s 15 million barrels of strategic oil reserves are meant to safeguard us from an energy crisis and to protect our economy. Leveraging our oil reserves to provide temporary relief does create some serious risk of devastating consequences if the disposal of these reserves is not reversed by a highly disciplined replenishment programme that is actually implemented.
We welcome the relief being offered to South Africa’s consumers and its economy and we call on government to rapidly pursue the restructuring of the regulated component of the fuel price.
The role of increasing South Africa’s refinement of crude oil should also be part of the restructuring process since local refining has the opportunity to create downstream job opportunities.
Media enquiries:
Brett Herron, GOOD: Secretary-General & Member of Parliament
Cell: 0825183264
Email: bretth@forgood.org.za
Samkelo Mgobozi, GOOD: Media Manager
Cell: 0792315977 (WhatsApp)/0829684021 (calls)
Email: samm@forgood.org.za