SA considers Singapore as benchmark for basic fuel price

The Energy Department of South Africa has proposed changing the basic fuel price structure in the country to reduce the costs of gasoline and diesel.

The proposals plan to make Singapore the main reference market for the base price of gasoline, diesel and kerosene, to remove a premium on the freight rate and reduce the coastal storage element in the calculation.

The price of basic fuel is just under half of the retail price of gasoline, which is regulated by the government and is determined by changes in international prices and the exchange rate of the rand. The proposals published in the Official Journal for comments make no mention of the changes in taxes and levies representing almost one third of the retail price of gasoline.

The retail price of gasoline has risen 22% over the last year to reach a record high in October, which is putting additional pressure on consumer spending and fueling inflation.

While Energy Minister Jeff Radebe reportedly announced that the government will finalize its proposals to cap the price of gasoline to 93 octanes by the end of January, the Minister of Finance, Tito Mboweni, said in his medium-term budget that the tax on gasoline would require sharp increases. manage the liability of his deficit road accident fund.

For the month of September, Radebe announced a temporary intervention to limit the monthly price increase, but in October, the cost increased by 1 R1 to more than 17 R (US $ 1.22) per liter in the province of Gauteng .

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