Fuel price blunder underscores need for fuel price review

After the December fuel price adjustment had already come into force at retailers across South Africa, and two full days after the official announcement of the fuel price by Minister Gwede Mantashe, the Department of Mineral Resources and Energy (DMRE) announced it had made a mistake with its fuel price calculations.

The department announced that instead of the 81c/l increase to petrol, it had erred in incorporating six cents into the price which it already included in the September fuel price adjustment. According to the DMRE the 6c/l difference is “… due to the fact that the adjustment of wages for service stations workers had already been implemented in September 2021.”

The Automobile Association (AA) says the error has already caused many South Africans to pay higher prices for fuel than they should have, and that this situation must be rectified.

The error affects the prices of all grades of petrol. The new increase for petrol is therefore 75c/l. Even with the reduced increase, the December fuel price adjustments still push the price of petrol past the R20/l mark.

“The error by the DMRE validates the AA’s call that a total review of the fuel price, and an audit of all the process and components which comprise the fuel price, is necessary. While we appreciate that errors occur, the impact of the fuel price on millions of South Africans cannot be underestimated. This error, in fact, must be the catalyst for such a review,” says the AA.

The AA says the fact that daily fuel price updates are being withheld from the public – and that only the monthly adjustment is now being released, means there is no transparency in the process of fuel price determination.

“In the past the daily updates provided some indication of fuel price movements to the public, but that is no longer the case. This, combined with this error by the DMRE (which was not identified by any one of the many people who should review this adjustment before the Minister’s official announcement), supports our view that a review of the fuel price is long overdue. We will continue to pressure government to initiate such a review so that all consumers are confident the pricing which is released by the DMRE is accurate and fair,” concludes the AA.