Call for comprehensive review of fuel price structure as petroleum minister reappointed

The price breakdown of fuel has come under scrutiny once again. File picture: Doctor Ngcobo / Independent Newspapers

The price breakdown of fuel has come under scrutiny once again. File picture: Doctor Ngcobo / Independent Newspapers

Published Jul 1, 2024


President Cyril Ramaphosa’s long-awaited Cabinet reshuffle under the new government of national unity has seen Gwede Mantashe retain control of the fuel industry.

While the general energy portfolio has been moved to another ministry, where it will be combined with electricity, mineral and petroleum resources remain the portfolios of Minister Mantashe.

This has led to concern on some fronts that much needed fuel price reforms will not be tackled adequately under this administration.

Gwede Mantashe remains South Africa’s minister of petroleum. File picture: Ayanda Ndamane / Independent Newspapers.

Following the cabinet announcement, the Automobile Association (AA) has once again called for the Department of Mineral and Petroleum Resources to conduct an open and transparent review of South Africa’s fuel pricing structure.

“South Africans remain constrained by high fuel costs and there is a dire need to review the country’s fuel pricing structure; each line item which comprises the fuel price must be interrogated and assessed,” the AA said.

“Together with civil organisations and experts, a better model must be sought in the interests of finding ways to mitigate rising costs and to buffer South Africans against ongoing geo-political developments which impact local fuel pricing,” the association added.

The AA has indicated that it would make itself available to the government for such purposes.

According to the price breakdowns provided by the energy department, South Africans currently pay R6.17 in taxes for every litre of fuel that they put in their tanks, with this comprising of R3.95 for the General Fuel Levy (GFL), R2.18 for the Road Accident Fund Levy as well as a customs and excise duty of four cents.

Altogether that represents 26.3% of the current cost of 95 Unleaded petrol at the coast, which is R23.46.

Although fuel costs are set to come down in July for the second month in a row, in June petrol still cost R1.69 more than it did in January 2024.

However, AA spokesperson Layton Beard told IOL that lowering or removing the contentious General Fuel Levy is easier said than done, as the government would almost certainly seek to raise taxes in other areas in order to fill that fiscal gap, which is believed to account for around 6% of the country’s total tax revenue, according to previous estimates.

This likely also explains government’s lukewarm approach towards incentivising electric cars in South Africa.

ALSO READ: Here’s why electric cars are not yet popular in South Africa

IOL Motoring