Could today’s emergency fuel intervention save consumers?



An emergency fuel price intervention will reportedly be announced at the National Assembly Thursday afternoon.

This second Fin24after Finance Minister Enoch Godongwana told Parliament last week that the National Treasury and other departments were discussing interventions to help consumers.

The hybrid session is scheduled for 13:00.

READ ALSO: The government plans to cut taxes and fuel taxes to fight the upcoming price hikes

during Speech on the 2022 budgetGodongwana said no general fuel tax hike on gasoline or diesel would be implemented this year or 2023.

The general fuel tax is currently R3.93 per liter. If Godongwana suspended this tax, South Africans could save nearly R4 at the pumps.

Consumers also pay R2.18 per liter for the Traffic Accident Fund (RAF) levy.

Unleaded 95 octane petrol currently costs around R21.60 per liter, unleaded 93 R2.14, diesel 0.05% (wholesale) at R19.49 and diesel 0.005% (wholesale) at R19.55 .

Earlier this month, the Central Energy Fund predicted that gasoline users could shell out more than R3 more at the pumps, with the price of diesel likely to rise by more than R3.

The spikes are attributed to the rise in international oil prices, exacerbated by the Russian invasion of Ukraine, as well as the value of the rand against the US dollar.

READ ALSO: Be prepared for further pain – the price of fuel is expected to be even higher in April

Shave R2 from the price of gasoline

The Association of Fuel Dealers of South Africa has proposed to eliminate the controversial RAF tax in favor of a mandatory insurance scheme.

A Commercial technical report he suggested that the tax should be scrapped and replaced with a mandatory flat rate for auto insurance, unrelated to the price of fuel at all.

The proposal comes a week after the RAF reported it was making steady progress in its turnaround strategy. The RAF has been technically insolvent since 1981.

But despite the RAF’s progress report, the 2022 budget review revealed that during the period 2020/21, the RAF accounted for RAF 83.7% or 374.6 billion of the liabilities of the social security funds. government.

The Automobile Association (AA) has long called for a complete overhaul of the government’s fuel pricing model and the abolition of levies.

“Our economy is closely linked to the price of fuel; it is a major input cost in the manufacturing, retail and agriculture sectors.

“We noted earlier that a review of the current fuel price structure, as well as an audit of all the elements that make up the fuel price, should be done sooner rather than later,” the AA said.

NOW READ: Good news for motorists as fuel taxes remain stagnant, pricing model to be revised

Compiled by Nica Richards.