Government is abusing its power with “artificially high” petrol prices – Solidarity – TopAuto
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Friday / 27 May 2022
HomeNewsGovernment is abusing its power with “artificially high” petrol prices – Solidarity

Government is abusing its power with “artificially high” petrol prices – Solidarity

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Solidarity has drafted a petition to South Africa’s parliament in an effort to deregulate and lower fuel prices.

On Wednesday, 2 March, fuel prices in South Africa will see another price hike – leading to rates of over R21 a litre for petrol.

In a press release, Solidarity has demanded that fuel prices be left to market forces, stating that “the government has a stranglehold on fuel prices which must be broken.”

Solidarity argues that the South African government is not acting in the interests of its citizens by allowing fuel prices to reach record highs amidst high unemployment and inflation.

“When the price of fuel rises, almost all other products and services also become more expensive, and ordinary South Africans struggle to make ends meet,” said Theuns du Buisson, economics researcher at the Solidarity Research Institute (SRI).

“Our research shows that in South Africa, price regulation is keeping fuel prices artificially high. This amounts to deception because the state, which was appointed by us to look after our interests, is thus acting contrary to our interests.”

While Solidarity has acknowledged that global events can and have affected fuel prices, it argues the government still cannot justify the recent price hikes.

“Apart from the exchange rate and the international oil price that currently make up just under half of the final petrol price, all aspects of the petrol price are determined by the state.”

Solidarity has described the taxes on fuel in the form of the fuel levy and Road Accident Fund levy as “excessive.”

In its own research, TopAuto found that, on average, 33.5% of the price South Africans pay for a litre of fuel goes to taxes and levies.

A monopoly

Du Buisson argues that as its stands, the government effectively has a monopoly on the sale of fuel.

“The government has effectively made it unlawful for anyone to compete by offering prices that are lower than that of their competition. Almost everyone in the fuel value chain is forced by law to disadvantaged consumers.”

Solidarity said it has opened its petition to the public for its input.

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