While there was some reprieve for motorists in January, experts are predicting a jump of around R1.30 per liter in February. Picture: Timothy Bernard
"Providing cheaper fuel to South African citizens won't happen at the push of a button, but will require a multi-layered, multi-departmental approach with the involvement of the private sector," the AA said.
The AA said there is an urgent need for a comprehensive, long-term analysis of the components of the fuel price and that all fuel price calculations need to be reviewed to determine if they're still relevant and appropriate to South African conditions.
"Retaining a pricing model because it's historically the one the country has always used doesn't make sense; the question must be asked whether there's a better model available and, if so, whether South Africa should consider replacing the existing one," the AA said.
It added that the levies for the General Fuel and Road Accident Fund contribute significantly to every liter of fuel sold, but citizens don't see any tangible benefits from these taxes.
"However, several questions arise with the allocation and use of these funds. For instance, the country continues to fund the Road Accident Fund through fuel taxes, but it's poorly managed and a drain on the country's resources.
“Apart from poor management, there are also questions as to whether the country has explored alternatives to compensate road accident victims and, critically, whether the private sector has been consulted for their inputs," the AA said.
According to the AA, another major issue is road safety and its associated costs.
“It said the government's last estimate in 2015 was that road crashes cost the economy about R150 billion annually. But there must be more of a focus on claims management, and on preventing the need for compensation in the first place.
"The private sector involvement in dealing with rising fuel costs has now become inevitable, and it remains committed to working with the government in the interest of consumers," the AA said.
Source link: IOL
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