No tax holiday for cash-strapped motorists and commuters
The Energy Department told Parliament on Tuesday that it would be unwise to give consumers a break from paying fuel levies as a means of reducing the financial impact of the fuel price.
CAPE TOWN – The Energy Department says there will be no tax holiday for cash-strapped motorists and commuters.
It told Parliament on Tuesday that it would be unwise to give consumers a break from paying fuel levies as a means of reducing the financial impact of the fuel price.
The levies are the reason South Africans pay more for fuel than citizens in neighbouring countries.
Minister Jeff Radebe says he will return to Parliament at the end of September with the outcome of a technical study on the impact of the fuel price.
The fuel price in South Africa is at an all-time high.
But government says it can’t do anything about global factors impacting the cost of importing oil.
And giving motorists a tax break, is not advisable.
The Energy department’s Tseliso Maqubela says, “Rather pass the lower price of crude oil to the consumer.”
The Department of Energy says deregulation of the fuel price could lead to massive job losses.
Maqubela said retailers would almost certainly opt for self-service stations.
“So, you would lose those 50,000 workers overnight. Is that the policy position that would be better serve South Africa?”
He said there’s no guarantee that deregulation would decrease the cost of fuel because the country’s distribution infrastructure is insufficient.
“There’s only one pipeline bringing in fuel from the coast. All the companies have to use that pipeline.”
Maqubela said he also doesn’t believe the government would be able to transform the sector if deregulation was allowed.
For now, government has no plan to lessen the burden on consumers, advising only that motorists not necessarily drive less, but rather more efficiently.
(Edited by Leeto M Khoza)