Mbalula responds to claims fuel price drop may be 'hijacked'

Transport minister Fikile Mbalula has responded to claims that the upcoming fuel price reduction may be “hijacked” by an increase to the fuel levy.

This comes after the Organisation Undoing Tax Abuse (Outa) expressed concerns the government may “hijack” the consumer benefits of an expected reduction in fuel prices and use them to pay for the Gauteng freeway improvement bonds, which e-tolls failed to do.

The AA reported that significant decreases in fuel prices are expected in September based on current unaudited mid-month data from the Central Energy Fund. It said the expected decreases will not be mitigated by any refunds to the general fuel levy, so they will be substantial.

Data indicates 95 unleaded petrol is expected to drop by about R2.60 a litre and 93 unleaded petrol by about R2.45 a litre. The wholesale price of diesel is expected to decrease by about R2.30 a litre and illuminating paraffin by almost R2.

Outa said it was worried that finance minister Enoch Gondongwana would use the lower petrol price as an excuse to raise the fuel levy by 25c-30c a litre to "cover the Gauteng freeway improvement bonds, which the e-toll debacle has failed to do".

“Should this happen, Outa will denounce this decision on the basis that the fuel levy has already been increased more than R2.50/l since the Gauteng freeway upgrade began in 2008. 

“The government failed to take up Outa's suggestion of a ring-fenced 10c/l increase to the fuel levy some 11 years ago which would have settled the freeway bonds by today,” said Outa CEO Wayne Duvenage.

Responding to the concerns, Mbalula said they were speculation and government has not made any pronouncements on the matter.

“I have engaged with the AA and Outa to discuss matters of mutual interest and I remain committed to constructive dialogue that assists in resolving challenges,” said Mbalula. “There is no reason to be alarmist on possible pronouncements on the government’s decision on the funding of the Gauteng freeway improvement project. 

“I urge everyone to wait for the formal pronouncements and not engage in speculation that offers no solutions.”