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Fuel Price Hikes Under the Spotlight

June 22, 2022

Department of Mineral Resources and Energy

Global geopolitical risks require an adept and participatory state in the economy.

The mineral resources and energy minister, Gwede Mantashe, emphasised this during remarks at a recent parliamentary debate on fuel price hikes.

The minister added that this refers to a state that “harnesses tools at its disposal, working together with social actors – business, labour, and broader society, to ensure economic growth and development”.

The minister called on South Africa to “explore oil and gas on her shores”.

“Having our own petroleum resources will reduce our dependency on foreign oil and cushion our economy, in particular our citizens as consumers, against imposed whirlwinds”, he said.

The minister pointed out that government is starting to notice an adulteration of fuel.

“This is confirmed by samples picked up at service stations and noticed in the increased importation, coupled with demand, of Illuminating Paraffin”, he said.

The minister declared that service stations found with adulterated diesel will face immediate closure and prosecution.

Work is underway with the South African Revenue Service to develop a marker to ensure greater traceability of paraffin in diesel.

The minister confirmed that government plans to invest in a new refinery.

“This is necessary for the country and critical for the needs of the SADC countries that remain highly exposed to unstable global supply markets”, he said.

Investment in terminals and ports is also important to ensure diversity of supply points.

The minister emphasised that calling for deregulation in the middle of a global economic war is ill advised.

“Even if we were to deregulate now, we do not foresee implementation of a self-service given its threat to jobs in an economy of mostly unemployed semi-skilled and unskilled economically productive job seekers”, he said.