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BL Premium reports that as consumers and businesses brace for even higher petrol prices and the government upgraded its inflation forecast, ministers said they were considering a suspension of the fuel levy to ease the impact of surging oil prices.
The government is considering measures to shield consumers as the uncertain environment means prices could still rise dramatically. Minerals & energy minister Gwede Mantashe told MPs on Tuesday that he and finance minister Enoch Godongwana were discussing ways to reduce the fuel price, such as the suspension of taxes and the fuel levy, which represented 30% of the pump price of petrol. Other options under discussion, Mantashe said, were to remove the demand side management levy of 10c/l on 95 octane unleaded petrol; introduce a price cap on unleaded 93 octane; or make part of the state’s strategic oil stock available to local refineries. However, a suspension of the fuel levy would have serious implications for the fiscus, which is projected to derive R89bn in 2022/2023, or about 6% of total tax revenues, from that source. Other measures that would have to be considered include encouraging people to work from home to reduce consumption; the enforcement of speed limits; and a restriction on how many litres each motorist would be allowed to purchase per visit to a petrol station. Meantime, the Treasury estimates that consumer inflation could reach between 5% and 5.5% in 2022 compared with the 2022/2023 budget projection of 4.8%. The central bank’s target is 3%-6%, and the reading in January was 5.7%.
- Read the full original of the report in the above regard by Linda Ensor at BusinessLive (subscriber access only)
- Read too, SA weighs petrol-price cap, rationing to curb costs, at Moneyweb
Get other news reports at the SA Labour News home page