A maximum price for unleaded fuel may be enforced by the government to help locals cope with the continuously rising prices of goods and services in South Africa. This suggestion was made by Minister of Energy, Jeff Radebe, in an effort to show support for the average South African who does not have disposable income.
With the international prices of crude oil on a constant upward trend, a task team comprising of the Department of Energy (DOE) and officials from the National Treasury are investigating what methods could be employed to cushion the blow of yet another increase.
“Government is deeply concerned by the rising cost of petrol in South Africa which is largely caused by the rand-dollar exchange rate, and the price of crude [oil],” said Radebe at a post-Cabinet briefing.
In September, the government made a once-off decision to cap the petrol hike. At the time the DOE said: “This is a once off temporary intervention to provide some relief for motorists and consumers against fuel price hikes”.
The government has now decided to examine whether it should set a maximum sale price each month for 93 unleaded fuel. It has set October 18 as a deadline to gather all the relevant information they will need to base their decision on.
The team looking into the possibility of a maximum price limit each month is also expected to consider what legal steps would be necessary to make this intervention possible.
The price limit is intended to encourage competitive discounts among petrol retailers.
Retailers say this maximum price limit will negatively influence their trade as although maximum sale prices could be set for fuel each month, this would not change the fuel retailers monthly costs and wages. Ultimately this maximum price limit could lead to retailers having to lay-off staff to accommodate the money lost from sales.
Picture: Pixabay