President Cyril Ramaphosa has taken a bold and much needed step in promising a review of the fuel price, but this process should unfold quickly, the Automobile Association (AA) warns.
During his speech at the opening of Parliament on Thursday, July 18, Ramaphosa announced that his newly formed Government of National Unity (GNU) would look to expand the basket of essential food items that are exempt from VAT, and undertake a comprehensive review of certain administered prices, including the fuel price structure.
This, Ramaphosa said, would help to identify areas where prices can be reduced.
The AA welcomed last weeks announcement, labelling it as an extremely important step in the right direction, as such an assessment of the fuel pricing formula is necessary to determine whether all components are properly calculated and still necessary in the current structure.
In addition to transportation, storage, wholesale and retail-related costs, South Africas fuel price structure comes with a heavy tax burden of R6.14 for every litre of petrol and R6.02 for each litre of diesel sold.
