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LISTEN: Govt considering fuel price ceiling

Minister of Energy Jeff Radebe says his department is in talks with the fuel industry on the possiblility of setting a maximum price for 93 octane petrol.

Fuel pump
Fuel pump / iStock

Motorists are struggling under the weight of a series of fuel price hikes, which has seen prices reach a record high. 

In October petrol spiked by between 99c and R1.01 a litre while diesel increased by R1.24 cents a litre.

Radebe says the suggested maximum price is part of efforts to lessen the impact on motorists. 

“I have an open mind on this question and my overriding consideration is how to cushion the most vulnerable in society so that they are not negatively impacted by the fuel price which is largely caused by external factors beyond our means especially the price of crude oil.” 

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In September, the department intervened by using the Central Energy Fund as a backup. 

Radebe says this was a once-off decision. 

“I am very positive on the issue of the rand-dollar exchange with the brand new from-the-box cabinet colleague Tito Mboweni whom the markets seem to love. At the moment that the rand-dollar exchange will be in our favour, in that eventuality we might be talking a different story.” 

Radebe says the petroleum industry has been given until the 18thof October to respond. 

Meanwhile, chief economist at Econometrix, Dr Azar Jammine, says he doesn’t understand the reason why government froze the fuel price in September, as opposed to increasing it by 30c per litre. 

 

Jammine says messing with fuel price at a time amid unpredictable international commodities prices is not advisable.

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