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Another fuel hike is on the cards, warns Gwede Mantashe

Minerals and Energy Minister Gwede Mantashe. Picture: Phando Jikelo/African News Agency (ANA) Archives

Minerals and Energy Minister Gwede Mantashe. Picture: Phando Jikelo/African News Agency (ANA) Archives

Published May 19, 2022

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Cape Town - Fuel prices are going to rise again due to global factors, Minerals and Energy Minister Gwede Mantashe has warned.

His warning comes against the backdrop of another surge in oil prices.

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He was looking at steps to address the fuel crisis.

Over the past few months, the war in Ukraine has led to a surge in oil prices across the globe.

Two months ago, Mantashe and Finance Minister Enoch Godongwana intervened to prevent the sharp fuel price increases. They allowed the use of R6 billion in fuel from the strategic oil reserves for April and May.

It has already been speculated by then that steep fuel increases were expected in June.

“Domestic and global economic realities under which the budget is delivered today remain dim, continuing with the difficult conditions of 2020 and 2021.

“In partnership with the minister of finance, we have introduced mitigating measures to contain the rise in fuel price. However, due to global events pushing oil prices above $100 per barrel and high US interest rates, fuel prices are set to rise again,” said Mantashe.

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He said they would implement several measures to deal with the energy crisis and had made strides in that regard.

He also warned that Eskom’s continued load shedding was having a negative impact on mining production and the economy.

Mantashe, who was delivering his department’s budget vote on Thursday, said load shedding was a serious factor in the economy and the government needed to increase the generation of energy from other sources.

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Eskom has been under pressure over its rolling blackouts.

The business sector has complained about the strain load shedding has on its operations.

Mantashe said they needed to deal with the problem before it put even more pressure on the economy and mining sector.

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“The department has implemented various measures on energy security and supply. However, load shedding is commonplace, adversely impacting mining production and the economy broadly. Therefore, we are highlighting the fact that load shedding is actually a negative factor in the economy,” said Mantashe.

He said the budget was delivered at the time the global economic outlook had not improved.

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Political Bureau

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