Dylan Bettencourt
The National Treasury announced on Tuesday that they would be extending the reduction in the general fuel levy, which softens the petrol price increase set for Wednesday.
The price of 95-octane unleaded petrol will rise by R2.33 a litre on Wednesday, while 93-octane unleaded petrol will go up by R2.43 a litre, the Department of Mineral Resources and Energy announced on Tuesday.
The increase was due to be R1.50 higher as the fuel levy reduction was set to end this month after being introduced solely for the months of April and May.
The relief granted by the treasury will be extended by one month until 6 July followed by a decrease of the reduction to 75c for the next month.
The fuel levy reduction will then be withdrawn from 3 August, confirmed by a joint statement released by National Treasury and the Department of Mineral Resources and Energy (DMRE).
Without the reduction being extended, petrol prices would have increased by nearly R4 which would have taken 95-octane petrol above R25 a litre.
“Due to this significant monthly price increase, the Minister of Finance has today submitted a letter to the Speaker of the National Assembly, requesting the tabling of a two-month proposal for the extension of the reduction in the general fuel levy,” the joint statement said.
Revenue lost during the fuel levy reduction is estimated around R4.5 billion for South Africa.
“Unlike the previous announcement, this proposal is expected to have an impact on the fiscal framework, as it will not be fully funded through a sale of strategic oil stocks,” the statement added.
The fuel price increase that has been felt around the globe is a direct consequence of the ongoing conflict in Ukraine by Russia, who are the third-largest producer of crude oil.
Russia’s fear that it would be locked out of the oil market as a response to their military operation has seen oil prices surge in recent months.
Image source: @Mail&Guardian
