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Treasury approaches Parley with further reduction proposal as temporary drop in petrol prices ends

Finance Minister, Enoch Godongwana had on Tuesday, submitted a letter to the Speaker of the National Assembly in response to the significant monthly petrol price increase.

In his letter, he requested that a two-month extension for the reduction in the general fuel levy be tabled.

Godongwana said the reduction will be a continuation of the relief from June 1, 2022 to July 5, 2022, then a downward adjustment to the relief for the second month to 75c per litre from July 7, 2022 to August 2, 2022.

He said the temporary relief would be withdrawn from August 3, 2022.

“The withdrawal of the temporary relief in the general fuel levy on March 31,2022, as per the original announcement, would contribute to an increase in petrol prices of close to R4 per litre, and push prices of 95 octane unleaded petrol (ULP) to above R25 per litre, an increase of just under 20 per cent next month,” added Godongwana.

“The revenue foregone in this extension is estimated at R4.5 billion. Unlike the previous announcement, this proposal will not be fully funded by a sale of strategic oil stocks.”

He said the government would remain committed to the fiscal framework set out in the 2022 Budget.

He said the chairman of the National Council of Provinces has also been informed of this proposal.

“Since this announcement, the continuing conflict in Russia-Ukraine has led to further unfavourable changes in the two key drivers of the regulated price, the exchange rate and the global oil price,” said Godongwana.

He said these events have subsequently led to even large increases in fuel prices compared to a few months ago when the temporary fuel levy relief was introduced.

On Tuesday, the Department of Mineral Resources and Energy announced fuel price increase effective midnight.

The price of petrol was increased by R2, 33 for 95 and R2. 43 for 93 from midnight on Tuesday.

The price of diesel increased by R1, 10 and R1 07 for different grades.

Illuminating paraffin was increased by R1, 56 a litre.

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