File picture: Mohamed Abd El Ghany / Reuters.
Johannesburg - There are mixed views about whether the proposed maximum cap on 93 unleaded and lead replacement fuel by the Department of Energy (DoE) will bring relief to cash-strapped consumers.

The AA said it was encouraged by the proposal and that the government was trying to find a solution to the problem but economist Dawie Roodt said he did not think the cap would work.

According to the AA, data from the Central Energy Fund suggests there might be further fuel increases by the end of October.

Roodt said the fuel price was calculated according to a formula and in order to bring about any form of saving, that formula will need to be adjusted.

“The easiest way to lower the fuel price was to reduce the taxes that are added to the fuel price.

“It may sound viable, but this will leave the government with less income, which they’ll need to then get from other sources,” said Roodt.

This would result in government putting up other levies and taxes or increasing the burden on fuel retailers, making their business less viable.

But AA spokesperson Layton Beard said the AA was encouraged by the proposal and the fact that the government was trying to find a solution to the problem by requesting comment from industry role-players.

“We would welcome any solution that means South Africans will pay less for fuel,” said Beard.

Sasol spokesperson Alex Anderson said it was engaging the DoE to investigate the maximum price cap.

“Sasol is engaging the department to investigate whether maximum retail prices for RON 93 petrol could stimulate demand for this grade and in so doing reduce octane wastage and save consumers money,” he said.

The Mercury