Umm Muhammed Umar

Radio Islam spoke to AA spokesperson, Layton Beard about the fuel price. He said that current calculations show that 95 Octane would see an increase of an estimated R1.95, per litre. That would bring the price of a litre of petrol to roughly R23.50.

There’s been talk that government may intervene.  Regarding whether the levies would be slashed to mitigate Aprils dreaded increase in the in the fuel price, Beard said that the Minister of Transport, the Minister of Finance, and the Minister of Mineral Resources and Energy claimed they had a plan to deal with the fuel price. However, they have not provided any details. Beard said that while the Minister of Mineral Resources had mentioned using South Africa’s strategic fuel reserves, he did not the value of the fuel reserves, nor what the level of the reserves were, and whether they had been replenished, after they had been sold in 2015. He added, “the other thing that’s been floated is dealing more effectively with the levies……maybe taking a levy holiday, or slashing them.” He said, “You know, it’s a difficult situation. The levees specifically are problematic. If you do away with them, you’ve got to ask where government is going to get that money, that they generate through those levies annually, and we’re talking around R130 billion a year.” He said government might be prepared to lose funds, for a limited amount of time, by giving consumers a ‘holiday’ from the levies.

The price of oil has been affected by event in Ukraine. However, the Rand has been strengthening against the dollar, causing confusion as to why petrol was still so costly. Beard said, “Well, the fact of the matter is, is that we’re still paying a premium for international oil, and that international oil is getting more expensive by the day. It has been seesawing, but we’ve seen it reach, you know, very high levels.” he explained further, “So, you know, when we look mid-month at the picture, well it was contributing 98% to the fuel increase, while the Rand was contributing only 2% to bringing it down. So, it’s all about international oil prices.”

It goes without saying that it was now going to cost a lot more to travel by car. And, for people who rely on road freight to get goods across the country, the increase will prove a major input cost. Beard commented, “And when they see these input costs rising, obviously, the price of products is going to rise as well.” He said, “I think that is where our big concern is, because that’s where it hits consumers – in the pocket.”

Meanwhile the taxi industry has already been complaining. Consumers who use taxis to get to and from work every day have also been spending a big percentage of their income on transport costs. beard said that this was a huge concern for the AA. He said, “in a place like Gauteng, where we have the Gautrain – which is so heavily subsidized by government; to the tune of R2 billion rand a year – these increases bring into stark focus, whether that is the right approach….. to actually spend that amount of money on so called public transport that only caters for a few, whereas the majority of people are still struggling just to get to and from work, and having to take out more from their own pockets just to earn a living.” He said it was a skewed situation.