National Treasury says talks are on-going to find ways to make up for lost revenue after the continuation of the fuel levy relief.
Deputy Finance Minister, David Masondo, during a parliamentary briefing said discussions are taking place to see how Government can minimize its losses after the R1,50 fuel levy relief, which was applicable in April and May, was again implemented for June.
In July the levy relief will be reduced by 75 cents per litre. Treasury will have to find R4,5-billion in revenue to fund this relief.
The reduction in the fuel levy for April and May was funded by a liquidation of a portion of the strategic crude oil
Treasury says the current temporary reduction in the fuel levy will be accommodated in the current fiscal framework in a manner that is consistent with the fiscal strategy outlined in the Budget.
Any changes, if required, will be announced at the time of the 2022 Medium Term Budget Policy
Government will also take further measures to help reduce fuel prices in a more sustainable manner:
- From 1 June 2022, the DMRE will remove the demand side management levy of 10c per litre that has been applied to inland 95 ULP.
- After a review and consultation by the DMRE, it is proposed that the basic fuel price also be decreased by 3c per litre in the coming months.
- Government intends to continue with consultations and proposals to remove the price cap on 93 ULP, which will partially deregulate the market and introduce more competition to lower pump prices.
- A review on the Regulatory Accounting System (which includes the retail margin, wholesale margin and secondary storage and distribution margins) will be completed by the DMRE to assess the potential to lower margins over the medium term.