Cape Town — The Automobile Association (AA) of South Africa has welcomed the decision by President Cyril Ramaphosa to conduct a fuel price review to combat rising fuel costs.
During his Opening of Parliament address, Ramaphosa said the Government of National Unity (GNU) will look at adding extra goods to the basket of essential food items that are exempt from VAT (Value Added Tax).
This announcement, in addition to the review of the fuel price, validates the calls made by the AA to mitigate the ever-rising fuel costs which add pressure to consumers monthly, it said in a statement.
“As far back as 2019 the AA called for a review of the fuel pricing structure, and an audit of all the components that comprise the fuel price. We noted at the time that fuel prices impact on all South Africans and that an assessment of the fuel pricing formula is necessary to determine whether all components are properly calculated and still necessary on the current formula,” the AA said.
The AA said that it has made the call for the fuel price review in the interests of South African consumers but little has been done to address the issue or initiate a review.
” The announcement by President Ramaphosa in his address at the opening of Parliament last night was therefore extremely significant and a step in the right direction,” the Association noted.
AA welcomes announcement by President Ramaphosa on the fuel price review https://t.co/bvKSIonaEC#ArriveAlive #FuelPrices #PresidentRamaphosa @AASouthAfrica pic.twitter.com/o0cfQJv00Z
— Arrive Alive (@_ArriveAlive) July 19, 2024
The AA added that fuel prices have increased steadily over the last few years. In January 2022m the price of 95 unleaded inland was R19.61, compared to R22.49 in January 2024. The fuel price for 95 unleaded on the coast costs R24.25, a near R5 increase since January 2022.
These price increases were in addition to the two taxes on fuel, namely the General Fuel Levy, costing R3.96 per litre for petrol and R23.84 per litre for diesel, and the Road Accident, currently costing R2.18 per litre for petrol and diesel, amounting to a total contribution of R6.14 for petrol and R6.02 for diesel.
“While we are cautious about simply scrapping these levies outright, we believe there is room for movement in specifically the RAF levy portion of the taxes. We also believe a comprehensive review may highlight other areas within the fuel pricing formula that can be better dealt with to mitigate rising fuel costs,” the AA says.
The AA says a fuel price review should be an open process that involves civil society organisations such as itself and others.
“The President has taken the bold step of announcing a fuel price review and that process must now unfold quickly. The outlook for fuel prices in August is bleak with little or even no relief forecast. Against this backdrop, and the major role fuel prices play in our economy and on personal budgets, the fuel price review is long overdue, and we hope that it gets underway as soon as possible,” the AA concludes.
AA welcomes announcement by Ramaphosa to conduct a fuel price review. Ah how cute. WHEN DO WE GET A FOOD PRICE REVIEW? FOOD PRICE CONTROL? @CYRILRAMAPHOSA @JOHNST
— pamela (@PamelaSalalah) July 19, 2024
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Compiled by Matthew Petersen
