Skip to main content

SA makes rare intervention to contain fuel prices

| Economic factors

South Africa intervened in setting fuel prices for September for the first time since the early 2000s as costs surged by more than inflation as the rand plunged, straining consumers.

A litre of 95-octane gasoline in Gauteng will climb by 5c to 16.08 rand, a record high, at midnight on September 5, the Department of Energy said in an emailed statement.

Gasoline prices in Africa’s most-industrialised economy, which imports all its crude, are regulated and recalculated monthly according to movements in the rand and oil prices, and annual changes to taxes. The under-recovery in the month to August indicated fuel prices would rise by 28c. They climbed 23 percent in August from year earlier, government data showed.

The advance will cater for forecourt attendants’ salary increases but does not cover the higher cost of fuel and the slump in the rand, which had its worst month against the dollar in August since May 2013, raising the cost of imports.

South African inflation accelerated to the highest level in 10 months in July, driven by increased fuel prices.

‘Temporary Intervention’

“This is a once-off, temporary intervention to provide some relief to motorists and consumers against fuel-price hikes,” the Department of Energy said, without explaining how the shortfall would be covered.

In July, President Cyril Ramaphosa said the government was planning interventions to mitigate the impact of record-high fuel prices, saying they posed a challenge for works and could crimp growth in the economy.

“Someone has to bear the cost of the under-recovery of the product that they imported and refined,” Peter Noke, head of terminals at Royale Energy, said by phone.

There has been no additional communication from the department with fuel retailers besides the press statement, said Vishal Premlall, a director at the South African Petroleum Retailers’ Association, whose members include the local units of Chevron South Africa, BP Southern Africa and Total South Africa.


Pin It

Related Articles

Petrol price earmarked for another hike in May

By: Siphelele Dludla – IOL Business Report THE Automobile Association (AA) has warned of another petrol price hike in May that will push the cost of living even higher for financially-constrained consumers, as inflation also remained sticky above...

Petrol price hike on Wednesday, but some diesel...

By: News24   Petrol will be hiked on Wednesday (03/04/2024), while wholesale diesel prices are mixed.  

SPAR shares tips on how to lighten the financia...

For many, Easter is a time of celebration and tradition, marked by gatherings with loved ones and delicious meals. However, the financial strain brought on by the increased cost of living may require families to adjust their usual celebrations, wh...

Reprieve for consumers at till as prices tick m...

By: Given Majola - IOL Business Consumers got a reprieve at the till this month as the cost of the average household food basket showed a marginal increase.

SA consumers feel the big squeeze: 99% have cha...

According to NIQ, 44% of South African consumers feel they are in a worse financial position this year compared to a year ago.