Government taking steps to mitigate fuel price hike impact

Friday, September 7, 2018

Deputy President David Mabuza says government has taken some steps to reduce the impact of fuel hikes. 

He said this when he fielded questions in the National Council of Provinces (NCOP) on Wednesday. 

His statement comes not long after Energy Minister Jeff Radebe announced steps that the department was taking to mitigate the impact of global fuel price hikes on the South African economy. 

“Our government has nonetheless taken interventions to address the fuel price increase that came into effect on Tuesday. 

“The projected 25 cents per litre increase was cushioned through government’s energy slate account, which is normally reserved for fluctuations to balance out erratic price movements,” he said. 

Mabuza said the increase in fuel prices is a matter of concern to government, its social partners and broader society. 

He said increases in petrol and other fuel prices are mainly due to global factors that are beyond government control.  

Some of these factors, he said, includes the dollar denominated price allocations, political challenges in Venezuela and the imminent US sanctions on crude oil exports from the Islamic Republic of Iran. 

“Unfortunately, the developing economies, particularly in sub-Sahara have been the hardest hit.  

“The Ministers of Energy and Finance are seized with the matter and as indicated by the Minister of Energy in his address to the Portfolio Committee on Energy on 21 August 2018, a joint task team, comprising senior officials from the two departments, has been set up to come up with proposals on how to alleviate the current situation of fuel hikes. 

“The team is expected to report back to the two Ministers by the end of September 2018. The Minister of Energy is having engagements with his counterparts in the region with a view of obtaining a more favourable dispensation for South Africa. 

“We appeal to this House and our people to allow this process to conclude and have the report presented to Cabinet on what should be done to ease the pressure on South Africans,” Mabuza said. 

He noted that the increases in Value Added Tax (VAT) have also negatively affected many households. 

“However, government has made the necessary provisions to zero rate a number of products for VAT, including brown bread, maize meal, samp, milk, rice, vegetables, eggs and fruits. 

“For those receiving social grants, government has made a provision for an additional allocation of R2.6 billion over the medium-term expenditure framework in order to effect an above-inflation increase, which will help cushion low-income households from the effects of the VAT increase. 

“Furthermore, the Minister of Finance established an independent panel of experts to consider and review the list of zero rated items. The panel submitted their report on 6 August this year to the Minister of Finance and it was subsequently released for public comment on 10 August 2018,” the Deputy President said. – SAnews.gov.za

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