More fuel price hikes on the cards, warns SAPIA
South Africans have been warned to brace themselves for more steep fuel price hikes in the coming months.
The South African Petroleum Industry Association (SAPIA) says government has little choice but to adjust the fuel price according to the vagaries of the international oil price and the exchange rate to the US dollar.
The price of fuel is expected to jump by as much as R4 a litre in June.
The association's Strategic Project Director Kevin Baart says if government doesn't work according to the working rules it will have a negative impact on the oil industry.
"We are looking at 70 to 80% of our local supply, it comes from imports. If government doesn't match an increase in oil prices with an increase in the pump price, companies will be reluctant to import and as a consequence, you could see stock-outs and can have a severe economic impact on the country. Unfortunately, we just have to bite the bullet, there is little that government can do."
In March, Finance Minister Enoch Godongwana reduced the general fuel levy by R1.50 for April and May in the wake of a steep increase influenced by high global oil prices following the Russian-Ukraine war.
Baart says government will likely not extend the fuel levy cut as levies and duties contribute 10% of the national income.
"For 2019 duties and levies they bought R120 billion of the national purse, making quite an important source of income. You can see the levy in the past two months must have had a big impact on how the National Treasury is dealing with that."
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