Continued fuel levy relief eases Wed price hike, but brace for more to come

Government finally announced an extension of the temporary reduction in the general fuel levy on Tuesday morning, ahead of a price increase on Wednesday.

The R1.50 per litre price cut implemented on 6 April, had been meant to end on 31 May.

RELATED: 2-month fuel levy relief likely to be followed by price cap on 93 octane petrol

The R1.50 relief will now end on 6 July, followed by a downward adjustment to a cut of 75c per litre from 7 July to 2 August.

This is expected to have an impact on the fiscal framework as it will not be fully funded through a sale of strategic oil stocks as the first relief measure was, the National Treasury said in a joint statement with the Department of Mineral Resources and Energy (DMRE).

For a full breakdown of the cost of different types of fuel from Wednesday, click here.

Fuel levy suspended for two months, ending 3 August

Everyone is waiting! Govt should have already announced fuel prices – AA

Bruce Whitfield interviews Layton Beard, spokesperson for the Automobile Association (AA) and Avhapfani Tshifularo, Executive Director at the SA Petroleum Industry Association (Sapia).

Government has very little wiggle room [when it comes to oil- and rand-related factors]… I think those long queues you’re seeing at the moment are going to be playing out in countries around the world… The real concern is what the knock-on impact of these increases is going to be on other prices.

Layton Beard, Spokesperson – Automobile Association

Is this temporary relief, while welcome, just a case of kicking the can further down the road considering the rising oil price?

We share factors contributing to fuel prices. #FuelPricesUnpacked
[Thread]. pic.twitter.com/iYOCUEsAMu

— Department of Mineral Resources and Energy ‏ (@DMRE_ZA) May 30, 2022

The European Union decision to further curtail trading of Russian crude oil is a factor to be watched closely says Tshifularo.

That is going to contribute to further tightening of the market – that’s on the oil side.

Avhapfani Tshifularo, Executive director – South African Petroleum Industry Association

The other thing… is that China has been in a lockdown but now the economy has been opened, which is going to add into the further demand on the finished product.

Avhapfani Tshifularo, Executive director – South African Petroleum Industry Association

He also notes that the official statement indicates that oil companies are losing big money in this environment, and future battles to procure their product will be another factor contributing to further fuel price increases.

Listen to the conversation with Beard and Tshifularo in the two audio clips below:

This article first appeared on CapeTalk : Continued fuel levy relief eases Wed price hike, but brace for more to come