The Democratic Alliance has called on the Minister of Mineral Resources and Energy, Gwede Mantashe, to propose a review of the current fuel pricing model following yet another round of fuel price increases.
On Wednesday, the price of petrol rose by 91 cents per litre to a record high of R18.20, while the price of diesel rose by between 54 and 55 cents per litre.
This is disastrous for South African families, as consumers face higher travel costs, the possibility of higher food prices, and rising operational costs for small businesses, says Kevin Mileham, DA shadow minister of mineral resources and energy.
The DA believes that input from major sector stakeholders must be sought urgently, and a new fuel pricing model that recognises the impact of fuel prices on the economy (including high taxes and consumer and producer inflation) must be developed.
According to the Department of Mineral Resources and Energy, the Basic Fuel Price (BFP) is currently based on the import parity pricing principle, that is, how much it would cost a South African importer of petrol to buy the product from an international refinery, transport the product from that refinery, insure the product against losses at sea, and land the product on South African shores. On top of this, government imposes various fuel levies which are adjusted annually to fund cross-government expenditure programmes, including the Road Accident Fund.
