Page 10 - DMEA Week 27 2022
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DMEA FUELS DMEA
South Africa increases fuel price
AFRICA FUEL prices in South Africa rose this week Eskom’s case, diesel is used to power its open-cy-
following the reduction of a gasoline levy and cle gas turbines, which helps reduce the impact
a new cost structure took effect. The govern- of load-shedding.
ment, according to Bloomberg on July 4, has Mobile operators make heavy use of diesel
announced that the fuel levy reduction that to keep their base stations operational during
applied from April 2022 was to be halved on July power cuts.”
6 ahead of its total withdrawal on August 3. The fuel price hikes, Bloomberg adds, will
The retail price of a litre of petrol will now place further pressure on household finances
range from ZAR26.31 ($1.59) per litre and and inflation, which breached the top of the
ZAR26.74 ($1.61), while the wholesale price of central bank’s target band for the first time in
diesel will be between ZAR25.40 ($1.53) and five years, after it reached 6.5% in May. Fuel has
ZAR25.53/litre ($1.54). a weighting of almost 5% in South Africa’s con-
“The prices are nearly ZAR10 ($0.60) [per sumer price basket.
litre] more than a year ago and the Department The global news agency estimates that fuel
of Minerals and Energy attributes the hikes to retail costs have surged by 36% since January
average international product prices for fuel 2022, increasing calls by opposition Democratic
increasing during the period under review,” said Alliance (DA) party and labour groups for the
BusinessDay, a local daily on Monday. government to deregulate the price. The party
The fuel price increase, triggered by a value has proposed a bill which, if approved, it says will
chain disruption linked to the Ukraine war, adds result in a lower fuel price in the country.
more misery in a country that is already grap- “The primary objective of the bill is to dereg-
pling with a wider energy crisis. Eskom, the ulate the fuel sector to increase competition in
power utility, has for some years been unable to fuel price-setting at both the wholesale and retail
supply enough electricity due to frequent break- level, which will result in lower petrol prices for
downs of its old coal-fired generating plants. As consumers, as retailers compete to win custom-
a result, it cuts supplies for up to eight hours daily ers based on price levels,” said DA official Kevin
in some places. Mileham as cited by businesstech on July 4.
On May 31, 2022 the government announced The Automobile Association of South Africa
an extension of the temporary reduction levy on said there is a need to interrogate all the compo-
gasoline and diesel until July 5 and thereafter nents of the fuel price, “to determine whether all
adjusting the relief by 50% from July 6. these components are still necessary in the exist-
“The soaring price of diesel is bad news for ing formula, and to establish if the current cal-
both Eskom and the mobile operators that use culations of these components are correct. The
extensive quantities of diesel in their operations,” longer this review is not initiated, the longer the
reports TechCentral, a local publication. “In country will wait for lasting solutions.”
P10 www. NEWSBASE .com Week 27 07•July•2022
