Government should keep its fingers out of petrol – Solidarity

Solidarity is calling on the South African government to lower fuel levies and deregulate the country’s petrol price.

South Africa’s fuel prices currently include four levies, with the newest addition – the Slate Levy – added in August 2021.

In addition, prices for all types of fuel are at an all-time high in the country – with South Africa experiencing fuel price increases nearly every month during 2021.

“The inflation rate of 5% is once again much higher than what consumers have become accustomed to over the past few years,” said Solidarity.

“With a rate of 7%, food price inflation is also higher than general inflation. Electricity and other household fuels have risen by a staggering 14% in the past year.”

“The worst is vehicle fuel inflation, which has risen 19.9% in the past year. On top of that, further huge increases in the fuel price have been announced for next month.”

Solidarity said it is crucial for the government to release its tight grip on fuel prices by reducing the taxes on fuel and deregulating petrol prices, as is the case with diesel.

“Fuel price inflation seeps through to almost every other product in the inflation basket, and therefore it should be the very first place where the government can make a difference,” it said.

“As with almost all government interventions, its efforts to regulate the industry are to the detriment of everyone in South Africa.”

South African fuel price calculation

In October 2021, the South African fuel price calculation took into account the following elements:

• Slate Levy (SL)
• General Fuel Levy (GFL)
• Road Accident Fund levy (RAF)
• Basic Fuel Price (BFP)
• Wholesale and retail margins, and distribution costs

This year saw an increase in two of the largest levies on fuel – the GFL and RAF – to R3.93 and R2.18 per litre, respectively.

Furthermore, the SL was added to the fuel price calculation in August to compensate for imbalances in the country’s Slate Account at the end of each month.

Currently, the SL stands at 6.58c/l, but a month of under-recovery situations point to a possible increase in the SL at the end of October, said the AA.

Detailed below are the average prices for fuel in South Africa over the past 20 years.