Offer relief at the fuel pumps but...

The soaring price of fuel has had a ripple effect on the cost food and other items, leaving consumers, particularly the poor and those in the low income bracket, reeling. This because the price of fuel does not only affect motorists, it affects every South African because transport and the cost of living also skyrockets.

It is in this context that this publication made a call to the government a week ago to find ways to shield the poor from the effects of high fuel prices worsened by the global price of crude oil and the conflict in Eastern Europe between Russia and Ukraine.

Therefore, it was welcome news to hear minerals and energy minister Gwede Mantashe tell MPs on Tuesday that he and finance minister Enoch Godongwana are discussing ways to reduce the fuel price. One of the considerations is the suspension of the fuel levy, which reportedly represents 30% of the pump price of petrol, for example. Other options include the proposal for removal of the demand side management levy of 10c/litre on 95 octane or to make part of state's strategic oil stock available to local refineries.

While we support these initiatives under consideration we are also mindful that SA is in a unique situation in that a substantial portion of the amount paid for fuel goes to the fiscus and funds the likes of the Road Accident Fund (RAF) whose finances are in the doldrums due to mismanagement. The poor state of finances at the RAF has a direct negative impact on those who rely on it for payouts in cases of disability and death as a result of accidents.

It is therefore prudent that the government moves with speed to put forward relief measures to mitigate the effects of the rising fuel cost but that it also moves with caution, aware of the ripple effects of its decision.

The unintended consequences of the suspension of the taxes and fuel levy could be that many people will argue in future that if the government could afford to do without these, why would it be necessary to reinstate them.