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May 26, 2022

By Annisa Essack

Unaudited data from the Central Energy Fund warned of massive fuel price increases across the board in June. Experts and economists estimate a petrol price hike by almost R4 a litre, which will see it breaching the R25 a litre mark. Leader of the DA, John Steenhuisen, briefed the media in Cape Town today on the party’s plans to slash the fuel price.

The party’s shadow minister of Mineral Resources and Energy, Kevin Mileham, spoke to Radio Islam International.

According to Mileham, the increase in the fuel price still stands as Minister of Finance Enoch Godongwana and Minister of Energy and Mineral Resources Minister, Gwede Mantashe, have not withdrawn the decision to reinstate the subsidy previously given on the fuel levy in April. He added that the current increase could be up to R4 per litre.

There is some light at the end of the tunnel, says Mileham as Minster in the Presidency; Mondli Gungubele, in a parliamentary briefing, said they were considering that review.

Mileham says that the subsidy should be reinstated immediately, the fuel levy should be scrapped, and the Road Accident Fund levy should be reformed. He also said that a comprehensive review of the fuel pricing model.

The DA, he said, wants the fuel price to be deregulated so that pricing can be more competitive, especially for the customer.

Being quizzed on whether Sasol would be able to produce at least a fraction of the fuel needed in the country, Mileham said that South Africa at one point had six refineries, of which four were shut down as of 2020. For the refineries to be re-opened, the owners, because they are privately owned, would have to see it as a worthwhile investment rather than a business case, leaving South Africans reliant on imported fuel.

The fuel subsidy and the Road Accident Fund levy add approximately R6 to the petrol price, which the DA believes is enabling the corruption and mismanagement and funding the lavish lifestyle of the ANC government.

Mileham said that the DA is proposing a tax rebate be introduced for businesses, farmers, fleet companies, taxi operators and the consumer who can prove that they have valid third-party insurance and can then request a tax rebate from SARS on an annual basis.

Mileham explained why compulsory third-party insurance was not the ideal for South Africa presently – a previous system was scrapped as it was not easy to implement as some drivers would allow their insurance to lapse or those who never had third-party insurance.

To endure that a viable system is implemented, he said that the Road Accident Fund would be kept as it is collected on every litre of fuel sold. SARS, however, should be allowed to manage a rebate through the annual tax returns of businesses and individuals to enable them to prove that they have third-party insurance.

Will we see a reduction, or how soon will the price increase be made public? Mileham says that we have to wait until next week and that the more important question would be whether the fuel subsidy would be reinstated or not?

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