The Fuel Retailers Association has cautioned against a proposal to ‘deregulate’ the country’s fuel price.
The move is expected to allow retailers to compete on price and offer motorists discounts and special offers to fill up at their stations. However, the association warned that the change could have to opposite effect of promoting competition, and ultimately set the country’s fuel sector back decades.
Sibiya said that fewer than 20% of the country’s petrol stations are owned by black South Africans, and a move to cut fuel margins further would hit these owners the hardest. “It’s a killer – you want to kill businesses this is what is being proposed here. We did say in a 2018 proposal that this is not going to work and we are surprised that it is being introduced now in an opportunistic way, taking advantage of rising fuel prices.”this week, finance minister Enoch Godongwana said full deregulation would only take place once the National Treasury figures out how to recoup the R90 billion loss the fiscus would take if fuel taxes are removed in one go.
Once the government has figured out a way of removing taxes and other administered prices from fuel, that will make it attractive for competition and drastically lower the price consumers pay.
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