An update on the country’s petrol price has been requested by the portfolio committee on mineral resources and energy ahead of the end of the intervention period in August.
President Sahlulele Luzipo said despite the latest intervention being welcome, a more permanent solution needed to be considered; the temporary relief will expire in two months.
Treasury and the Department of Mineral Resources and Energy have announced the extension of the temporary relief for the first month (from 1 June to 6 July 2022) and a downward adjustment for the second month (from 7 July to 2 August 2022).
As reported by the Department of Mineral Resources and Energy (DMRE), both petrol and diesel prices increased heftily for June 2022.
In addition to the steep increases, National Treasury also announced two more months of fuel price intervention – up until the beginning of August.
The increase will remove R1.50 from the general fuel levy in June and will be halved to 75 cents per litre in July – with the remaining 75 cents being fed back into the fuel price.
A demand-side management levy will be removed from petrol 95 (inland) by the DMRE as an additional, more permanent intervention.
“We need to ask ourselves a pertinent question as to what will happen after two months when the fuel price is still high. A piecemeal review is unsustainable, in our view,” he said. He said the government should start considering placing domestic taxes elsewhere, saying that deregulation is likely to impact negatively on black-owned small businesses.
As consumers and businesses adjust to this new reality, the temporary reduction in the general fuel levy will only dampen the impact of persistently high fuel prices, Treasury said.