Looks like South Africans will have to continue paying more as fuel price is expected to skyrocket. Mineral Resources and Energy Minister, Gwede Mantashe has confirmed that the general fuel levy reduction on fuel will not be extended beyond May.
Finance Minister, Enoch Godongwana announced that the general fuel levy which is R1.50 will be reduced from the price of fuel as a form of relief to motorists for April and May.
GENERAL FUEL LEVY CUT ‘WON’T’ BE EXTENDED
Mantashe said the fuel levy reduction will not be extended beyond May, however, his department still has to consult with the National Treasury on the matter.
If the latest data from the Central Energy Fund (CEF) which regulates petrol prices in SA is anything to go by, then the petrol price could increase by R3 per litre in June, considering the fact that the fuel levy reduction is coming to an end in May.
CEF data indicates that petrol and diesel could increase for just under R2 per litre.
CALLS FOR LEVY REDUCTION TO BE EXTENDED
OUTA CEO, Wayne Duvenage said they have written to Godongwana to consider the extension of the reduction, failing which the price of petrol and diesel will increase to over R25 per litre in the coming months.
Duvenage said that extending the reduction in the levy will obviously affect National Treasury’s collections by roughly R2.8 billion a month, however the economy will be “significantly worse-off with petrol prices in excess of the R25 per litre mark”.
“OUTA has also suggested that in the event that this reprieve must be terminated, that the Minister considers a phased-in approach over three months at 50c a month.
“The high fuel price has an ongoing negative effect on the economy, affecting a wide range of issues such as food prices and commuter costs.”Wayne Duvenage
Duvenage said they also believe that keeping the fuel levy reprieve in place for a longer period provides the Minister with an opportunity to seek greater public sector savings and encourage prudent spending habits.