The Ministry of Energy examines the cost of basic fuel

The Ministry of Energy has invited the public to comment on its calculations of the underlying prices for fuel, diesel and paraffin, known as the Base Fuel Price.

This is the price of fuel before taxes, transportation and other charges.

In a discussion paper published in the government's official newspaper last week, the ministry is asking the public to comment on the price of basic fuel before the end of January next year.

The FPB is one of four components of the cost of fuel at the pump in South Africa. The others are the general fuel tax, the road accident guarantee fund tax and the distribution, transport and wholesale costs.

The document includes a number of proposed adjustments to the formula that it uses to calculate the FPB, ranging from the change in reference markets that it uses to calculate import costs, reducing the number of days that refiners need to keep their fuel.

Although Energy Minister Jeff Radebe said his department is also studying the possibility of setting a cap on the price of fuel, this is not included in the document.

The Ministry of Energy said it expected that the revised base fuel price formula would be implemented in 2019 after "extensive consultations with all wholesalers". He did not provide a more accurate date.

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