The price of petrol has increased by 5 cents per litre after the government intervened to avert what was to be a 25 to 28 cents per litre increase. File photo: African News Agency (ANA)
Durban - Economists have warned that by intervening and curbing this month’s petrol price increase, the government has created unreasonable expectations.

Another pressure group has also warned that the government has merely rescheduled the increases.

At midnight the price of all grades of petrol increased by just 5 cents per litre after the government intervened to avert what was to be a 25 to 28 cents per litre increase.

In a statement issued on Monday, the Energy Department announced the petrol price would remain unchanged this month, except for the 4.9c/litre increase to cater for the annual salary increase for forecourt attendants, cashiers and other administration staff.

“The department has decided to intervene temporarily for this month.

“This is a once-off temporary intervention to provide some relief to motorists and consumers against fuel price hikes,” the department said.

This comes in the wake of growing calls and protests from opposition parties and civil society for lower fuel prices.

The Efficient Group chief economist Dawie Roodt said the government’s intervention was irresponsible and had created expectations “that the government has this magic wand to control the petrol price”.

“I do not know exactly how this intervention is structured but I suspect they are depleting the reserve or the state account.

“If the rand continues to weaken, will they continue doing the same thing?”

Professor Bonke Dumisa said the government’s intervention sent the wrong message that the government would give in to protests.

He, however, said the move was likely to be welcomed by consumers who would get some relief.

People Against Petrol and Paraffin Price Increases (Papppi) slammed the intervention, saying it merely meant the increases were rescheduled.

“We can expect massive hikes next month as this department uses a pricing model that calculates fuel prices based only on international fluctuations,” said Papppi convener Visvin Reddy.

He said the organisation would continue with its campaign against fuel price increases.

“They (the government) are ignorant of the negative impact high fuel prices have on the majority of South Africans.

“Today we are paying the highest we’ve ever paid for fuel, and this is as a consequence of incompetent politicians elected into power,” said Reddy.

The Mercury