By Zuko Komisa
The formal process of deregulating the price of gasoline in South Africa has been launched by the Department of Mineral Resources and Energy.
Gwede Mantashe, the energy minister, published a government gazette on Friday seeking for input on his plan to set a price cap for 93 octane.
Fuel retailers will be able to establish their own fuel prices, including gasoline discounts, thanks to this.
Currently, the government determines the exact price of fuel
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Kaya Biz with Guguletthu Mfuphi spoke to Peter Morgan – chief executive of the Liquid Fuels Wholesalers Association of South Africa on the process to be followed.
LISTEN TO THE FULL CONVERSATION HERE:
Morgan said the biggest concern with the proposed formal process is the jobs.
“It’s really about the jobs that are going to be lost, it’s about the sustainability of small businesses, and it is also about transformation.”
‘Our opex margin, which is our expenses, which is given by the government is only R1,33 a litre, and 60 per cent of that is really accommodating the employment cost.
If we are then expected to use that R1,33 to compete amongst each other it means then we have to take somewhere, and the sad casualties will be the jobs” Morgan said.
By switching to a maximum price, or price cap, fuel stations would be free to offer fuel at discounts they deem appropriate, such as price specials, package discounts, or volume discounts.
Currently, the government determines the precise price of fuel, and it is against the law to sell it for less.
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