The skyrocketing fuel price negatively affects all South Africans. Petrol and diesel are vital productive inputs in our economy. It goes without saying that when their costs increase, so do the prices of nearly everything else. We use fuel to produce food and extract raw materials. More than 77% of our land freight is transported by road. Most people commute to work in vehicles with internal combustion engines. Thus when it comes to fuel price increases, everyone suffers – especially the poor.
From January to June the price of petrol increased by 25% and diesel by 36%. Since June last year, these prices went up by 43% and 60% each. These numbers are astronomical. It is highly doubtful that the public can sustainably absorb massive fuel price increases over such a short period. Especially concerning is that analysts caution we may pay R30 – and even R40 – for a litre of petrol in the near future. Considering that the rising fuel price is a significant driver of inflation, we face a potential cost of living crisis due to a destructive inflation spiral.
The situation is not beyond the government’s control, and they can take meaningful action to address skyrocketing fuel prices. Approximately 36% of the fuel price consists of taxes: the General Fuel Levy (GFL) and Road Accident Fund (RAF) Levy. In 2021 the Automobile Association of South Africa recommended to Parliament to investigate the current pricing model for all fuel and that a recalculation and audit of existing elements within the pricing mode are needed. The government has already demonstrated willingness to address the problem by implementing a reduction in the fuel levy from 6 April to 31 May – which they then extended to 3 August.
Understandably there is much public frustration and anger about rising fuel prices. The unfortunate reality is that occasionally these frustrations are expressed via violent protest actions. This underlines how important it is to involve the public in decisions about fuel price structures. Does the public see value in the two fuel levies? Do they agree about how the money taxed is being used? Should these levies be reduced or scrapped? These are important questions that deserve answers.
To address these questions, DearSA is running a campaign calling for public input on an independent review of the fuel price structure and taxes. So far, more than 4 000 South Africans have submitted their comments. As we have seen from previous participation campaigns on pressing issues, significant public pressure forces the government to respond. Therefore it is vitally important for South Africans to take ownership of this problem by using the tools of our democracy.
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