ANC government must carry the full blame for the impending fuel price hike
4 September 2023
Despite a convergence of ideas from the Democratic Alliance (DA), civil society and more recently the South Africa Reserve Bank (SARB), on the need to review the fuel price methodology to make fuel more affordable to consumers, the ANC government has stubbornly refused to take urgent policy steps towards fuel price rationalization in South Africa.
The impending fuel price increase on Wednesday is a direct consequence of a fuel price framework that no longer serves the interests of consumers but has become an instrument to extract high taxes to fund the ANC’s profligate state. Instead of cushioning consumers against the impact of increasingly unaffordable fuel prices, the ANC government has chosen to bury its head in the sand and let consumers face the consequences.
The DA has repeatedly called for a review of South Africa’s fuel price methodology to bring it in line with international best practice. In consultation with industry stakeholders, we are of the view that taxes, levies, transport and storage costs can be standardized across the board to enable cost savings and fuel price rationalization. It’s a position that recently received concurrence from an SARB economic note where the Reserve Bank admitted that there is a scope for fuel price determination reform.
That no action is being taken by the Department of Energy to start the reform process, reveals a dogged determination by Minister Gwede Mantashe to retain state control over the fuel value chain. While there is clear evidence that high fuel prices are hurting the economy, pushing consumers to the brink and exacerbating a high cost of living environment, the ANC has adopted an indifferent and cavalier attitude which simply confirms that they do not care about the welfare of consumers.
In June 2022, the DA submitted a petition with more than 130 000 signatures to the Ministers of Finance and Mineral Resources and Energy asking them to slash fuel prices through a targeted focus on the general fuel levy, fuel tax reform and deregulation of the sector. Since then, we have received no response and it has been business as usual for the clueless ANC government.
While South Africans are struggling to make ends meet with skyrocketing fuel, food, and transport prices, the ANC government has yet to table any viable solutions. The South African public simply cannot afford further fuel hikes, the resultant price increases on other essential necessities.
Issued by Kevin Mileham, DA Shadow Minister of Mineral Resources and Energy, 4 September 2023
