Kaya 959 Reporter
South Africans have welcomed the news of the government’s intervention to ease their financial burden by decreasing the price of fuel.
According to finance minister Enoch Godongwana, the government would intervene in April to lower South Africa’s record-high petrol price.
Godongwana said this will be accomplished by temporarily lowering the general fuel levy (GFL) contained in the Basic Fuel Price by R1.50/litre from April 16 to May 31, 2022, in a speech to parliament on Thursday (31 March).
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Kaya Biz with Gugulethu Mfuphi spoke to Xhanti Payi, an Economist and Founding Director at Nascence Advisory and Research to unpack this new development.
Listen to the full conversation here:
According to Godongwana.Treasury has already pledged to assist citizens by announcing no hikes to the general gasoline duty or the Road Accident Fund fuel levy in its 2022 budget.
Payi says the intervention by the government came at the right time for South African consumers.
“I think it’s an important effort by the government to try and alleviate some of the pressures, we know many South Africans are facing pressures from rising food prices, and have been hit by interest rates hikes especially those who have bonds,’ said Payi.
This month, motorists paid R1.46/litre extra for petrol, with a similar hike expected in April.
With the money withdrawn from current reserves, Godongwana claims the action will have no impact on the fiscal framework. After Russia’s invasion of Ukraine led global oil prices to rise, South Africa has been hit by record high petrol and diesel costs.
Once the two-month time has passed, the minister added, a variety of interventions would be explored, including a review of the basic fuel price.
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