Government has offered much-needed short-term reprieve to motorists by extending the temporary reduction in the general fuel levy of R1.50 per litre.
Initially, the Ministers of Finance and Mineral Resources and Energy had on 31 March 2022 jointly announced a temporary reduction in the general fuel levy of R1.50 per litre from 6 April 2022 until 31 May 2022.
This was to provide limited short term relief to households from rising fuel prices following the Russia/Ukraine conflict.
On Tuesday, the two departments said relief was to be funded by a liquidation of a portion of the strategic crude oil reserves.
“Since this announcement, the continuation of the Russia/Ukraine conflict, supply chain bottle-necks and a tightening of global monetary policy have led to further unfavourable changes in the two key drivers of the regulated petrol price, the exchange rate and the global oil price.
“These events have led to even larger increases in fuel prices compared to a few months ago when the temporary fuel levy relief was introduced. The withdrawal of the temporary relief in the general fuel levy on 31 March 2022, as per the original announcement, would contribute to an increase in petrol prices of close to R4 per litre, and push prices of 95 octane unleaded petrol (ULP) to above R25 per litre, an increase of just under 20 percent next month.”
The departments said due to this significant monthly price increase, Finance Minister Enoch Godongwana on Tuesday submitted a letter to the Speaker of the National Assembly, requesting the tabling of a two-month proposal for the extension of the reduction in the general fuel levy.
“This will take the form of a continuation of the relief of R1.50 per litre for the first month, from 1 June 2022 to 6 July 2022, and then a downward adjustment to the relief for the second month to 75c per litre from 7 July 2022 to 2 August 2022,” they said.
They added that the temporary relief would be withdrawn from 3 August 2022.
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