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DA hands over its fuel price deregulation bill to MPs in the wake of fuel price hike

DA MP, Kevin Mileham, speaks to animal welfare groups who marched to Parliament to protest against the shipping of live sheep in inhumane conditions. He is now tackling the state on its exorbitant fuel levies, and record-high fuel prices. Pictures: Brendan Magaar/African News Agency (ANA)

DA MP, Kevin Mileham, speaks to animal welfare groups who marched to Parliament to protest against the shipping of live sheep in inhumane conditions. He is now tackling the state on its exorbitant fuel levies, and record-high fuel prices. Pictures: Brendan Magaar/African News Agency (ANA)

Published Jul 5, 2022

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Johannesburg – The DA’s mineral resources and energy spokesperson Kevin Mileham, MP, handed over his party’s fuel price deregulation bill to Parliament on Monday in the wake of a new fuel price hike announcement.

This comes after the Department of Mineral Resources and Energy announced that the price of petrol for both 93 and 95 ULP and LRP will increase by R2.37 and R2.57 per litre from midnight tomorrow, respectively.

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The DA’s deregulation bill handed to Parliament for processing by Parliament’s legal services will seek to amend the Petroleum Products Act, which gives the government the power to prescribe the price of petroleum products.

The DA believes that the regulated fuel price system is programmed to work against the South African consumer, saying that the average fuel price is composed of at least seven levies that combine to make our fuel one of the most expensive in the region, when compared to countries like Botswana, who happen to get most of their fuel supplies from South Africa.

Mileham said, “We intend to publish our ‘Notice of intention to introduce’ in the government Gazette later this week, in which the public will be invited to comment on the stated aims of our bill.

“Now the ball is firmly in the ANC government’s court, and it has the chance to do the right thing. The success or failure of regulating the fuel price, now rests with the ANC in Parliament,” he said.

Many consumers spend a large portion of their salaries on ever-increasing transport, and the frequent fuel price increases are leaving many with little to spend on the equally expensive basic food basket.

The greatest concern regarding the high fuel prices is that it will hit the poorest the hardest at a time when they are already struggling under the consequences of 46% unemployment; load shedding; soaring global inflation driven by Russia’s invasion of Ukraine; and a state increasingly unable to deliver on even its most basic mandate.

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“South Africa’s high fuel prices are a consequence of the government’s mandated fuel price controls that have killed competition, and failed to deliver efficient cost-reflective prices,” said Mileham.

Mileham added, “Given that South Africans will wake up to another hefty fuel price increase that will take the fuel price well beyond R25 a litre on Wednesday, the primary objective of the bill is to deregulate the fuel sector to increase competition in fuel price setting at both the wholesale and retail levels, which will result in lower petrol prices for consumers, as retailers compete to win customers based on price levels.”

Mileham added, “The bill does this primarily through the removal of section 2 of the Petroleum Products Act. The bill also amends section 2(1)(d) to allow for businesses to implement creative methods of trading, which may result in reduced petroleum prices.”

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The DA has also called on the Competition Commission to watch closely the fuel price market for any anti-competitive practices, and should there be any then they should follow up with investigations and remedial actions against the necessary parties.

“Independent estimates indicate that costs and profits at the wholesale, transport, and retail-levels account for about 20% of the fuel price. This is unsustainable if South Africa is to have a competitive fuel market, and fuel price system that protects consumers from exorbitant increases,” said Mileham.

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