Proposed petrol price plan shouldn’t be rushed

While next month’s fuel price decrease will be a massive relief for battered consumers and motorists, the future doesn’t necessarily look all that rosy on the petrol front.

The South African Petroleum Retailers Association (Sapra) says they were approached by Government for comment on the proposed publication of maximum retail prices for 93 octane grades, something which could see motorists score down the line as various suppliers will compete in terms of the price per litre.

But Vishal Premlall, director of Sapra, has appealed for an extension on the required date for comment.

“We are concerned that the timeline allotted to give input will not enable fair and reasonable consultation with all affected stakeholders,” he says, adding that of significant importance, a proposal of this magnitude, coupled with current market conditions including low demand, margin under-recovery and continuing rising costs, could result in job losses.

“There needs to be clarity on items such as price competition between retailers, the next steps once the proposal goes ahead, and how new entrants to the market will be affected, among others. We believe the only way to gain clarity will be through intensive impact analysis conducted by an independent company and input from all stakeholders.

“We strongly support Government’s attempts to lower the ever-increasing fuel price that has impacted cash-strapped consumers, businesses at large and the overall economic stability of South Africa. The attempt to bring price relief for the consumer needs to be explored in further detail.

“Deferring this responsibility to the retailer is, however, not going to yield the significant results needed to bring about consumer relief. Rather a full analysis of the basic fuel price needs to be explored,” Premlall concludes.

All very valid points, which brings us to the question, why the haste by

Government and not following the logical steps as suggested by Premlall? The upcoming relief of over R1 a litre will already by welcomed by all motorists and consumers alike, so why rush something that will only benefit them with maybe a dozen cents per litre but might actually cause more harm than do good to the industry?

Is it far-fetched to assume because it will make the ruling party – along with putting e-tolls on the back-burner – look good ahead of next’s year general elections?.