Is it time to deregulate the fuel industry in South Africa?

which considers that the government should stop fixing the price of fuel in favor of free competition.

Unlike many countries deregulated in fuel, where prices vary from one yard to another, SA motorists pay exactly the same for gasoline everywhere they go. buy, because the price is dictated. By the law. The only variation is that domestic drivers pay slightly more than those on the coast to cover the cost of transporting fuel from coastal deposits. Diesel prices are regulated only at the wholesale level and there are price differences between the various seats, which allows motorists to make the best choice

unleaded and R15.80 for 93 unleaded (interior), and R15.43 for 95 unleaded and R15.29 for 93 unleaded (rib).

These are high records, and were caused by the combination of a lower rand, But fixing this situation by the deregulation of the fuel industry and the dominance of market forces only would not be free of losses.

This would lead to a price war that would almost certainly lead to higher oil prices. number of gas stations to close, especially the smaller and more remote ones that would not have the economies of scale needed to compete with their larger competitors. Aside from the jobs that would be lost at these gas stations, the fuel could be much more expensive or unavailable outside major urban centers. Motorists living in these areas may have to travel farther to fill their cars, and the extra fuel used to do this may negate the less expensive fuel economy.

Other Ways to Lower Prices [19659003] This is a complex problem not easy to solve. However, while the industry is still regulated, there are ways to reduce the price of fuel.

Following the latest rises and another increase scheduled for next month, President Cyril Ramaphosa recently instructed his ministers to take action to cushion the financial blow to motorists

. half of all its oil, to produce more oil and thus affect the supply-demand balance to reduce the price of oil. One can guess how the Saudis react to this bold demand, but our government holds a significant share of the price of oil.

While South Africa imports most of its oil from abroad and is at the mercy of international oil. With regard to prices and exchange rates, our government controls one-third of the price of fuel in the form of the fuel tax and the Road Accident Fund (RAF)

. liter to the RAF plus a general levy R3.37, and there have been calls from, among others, the Undoing Tax Tax Organization (Outa) and the Democratic Alliance, to reduce these taxes.

The DA and the Outa are planning a joint march of Church Square to the Treasury in Pretoria next Tuesday to demand that the price of oil be reduced by at least R1 per liter.

Motorists have long been a convenient cash cow to fill the government crates, but without the road users necessarily seeing a direct benefit for what they're paying. The fuel tax is allocated to a general fund rather than to the maintenance of roads, and it has increased by 165% over the last decade.

Ramaphosa would have excluded the possibility of reducing taxes because of its impact on the budget. However, the lack of funding could be mitigated by reducing the looting and inefficiency of the government, says Outa, who estimates that many fuel tax increases have been made to cover deficits due to mismanagement and corruption. corruption

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