Solidarity threatens legal action to force deregulation of South Africa's petrol price

[Jan]

Legal threat over R20 petrol price in South Africa

The South African government must urgently deregulate petrol and diesel prices in South Africa, or it could face legal action.

This is the call from labour union Solidarity, which has warned that the surging fuel price threatened economic growth and that current price controls were not benefitting motorists.

 

[McGuywer]

Isn't diesel unregulated? If it is, it is not much cheaper?

 

[LCBXX]

Actions speak louder than threats.

 

[mpdjhb]

Isn't diesel unregulated? If it is, it is not much cheaper?

unregulated means selling price is not set by government - so the difference between the cost of the fuel that the station buys vs their selling price (the margin) is not fixed. This means competition on the margin which reduces the cost you pay.
Now - tax levels on the fuel is another story - and that contributes to the high price.

edit: so in principle (someone correct me if wrong) - there is no reason a fuel station cannot sell diesel at R1 a litre and take a massive loss.

 

[deweyzeph]

unregulated means selling price is not set by government - so the difference between the cost of the fuel that the station buys vs their selling price (the margin) is not fixed. This means competition on the margin which reduces the cost you pay.
Now - tax levels on the fuel is another story - and that contributes to the high price.

edit: so in principle (someone correct me if wrong) - there is no reason a fuel station cannot sell diesel at R1 a litre and take a massive loss.

I don't think deregulation will make much of a difference to the fuel price. The real problem are the fuel taxes which the government will never lower because fuel is one of those grudge purchases that everyone will always buy no matter how high the price is.

 

[GhostSixFour]

Actions speak louder than threats.

This way they get double as much press coverage. First, threatening. Then, doing.

 

[cr@zydude]

unregulated means selling price is not set by government - so the difference between the cost of the fuel that the station buys vs their selling price (the margin) is not fixed. This means competition on the margin which reduces the cost you pay.
Now - tax levels on the fuel is another story - and that contributes to the high price.

edit: so in principle (someone correct me if wrong) - there is no reason a fuel station cannot sell diesel at R1 a litre and take a massive loss.

Yes. As with cigarettes, in theory a fuel station could sell their diesel for less than the taxes, as long as the station is still paying SARS.

In reality, there's a R2.27c/l retail margin on petrol and that is what stations will compete on.

As a reference, wholesale 50ppm diesel is R17.23/l in Gauteng. What are guys paying at retail?

 

[_TrXtR_]

our government shouldn't be allowed to regulate anything. They have on several occasions shown that they do not have the countries best at 'heart' when they do things, they always steal, and it would be irresponsible if any court would allow them to continue.

 

[borro]

our government shouldn't be allowed to regulate anything. They have on several occasions shown that they do not have the countries best at 'heart' when they do things, they always steal, and it would be irresponsible if any court would allow them to continue.

They very hungry tummy.

 

[LCBXX]

This way they get double as much press coverage. First, threatening. Then, doing.

Why? Just get to the legal action and get your media coverage with it. It's not like it is a conspiracy on why the ANC government wants to keep fuel prices regulated.

 

[rietrot]

Isn't diesel unregulated? If it is, it is not much cheaper?

You can buy it for quite a bit cheaper at selected garages or at the depot if you want to.

 

[rietrot]

Interesting how the rewards programs get around the price controls actually. More people should exploit this loophole.

 

[hj007]

There are many many ways to provide cheaper transport options (since that's ultimately what the uproar is around fuel price). Countries that have cheap efficient means of transport either through rail/metro/cycling or low tax/subsidies on EV, all great options to the fuel prices in those countries.

SA? we have crickets...

 

[GhostSixFour]

Why? Just get to the legal action and get your media coverage with it. It's not like it is a conspiracy on why the ANC government wants to keep fuel prices regulated.

They need funding, and they get funding by being in the news. The more and longer they are in the news, the better for them.
They likely don't give a hoot about the actual prices, but they do give a hoot about having people sharing news articles on FB or twitter.

If this was about real change, they would've started the legal proceedings before the elections already. IMO.

 

[LCBXX]

They need funding, and they get funding by being in the news. The more and longer they are in the news, the better for them.
They likely don't give a hoot about the actual prices, but they do give a hoot about having people sharing news articles on FB or twitter.

If this was about real change, they would've started the legal proceedings before the elections already. IMO.

Agreed.

 

[WollieVerstege]

Deregulation will also have to go hand in hand with other changes like self service in order to make it more viable and give the fuel stations a wider margin to play with. Just came back from Europe and pumped my own gas multiple times - it really is not rocket science. If Americans can do it, so can we.

 

[Johand]

Solidarity’s call echoes that of agriculture organisation AgriSA, which has warned that rising fuel prices will significantly impact food prices.

Not sure what the article has to do with AgriSA. Farmers use mostly Diesel and not Petrol and they get refunds on it through the Diesel Refund Scheme, so they don't pay RAF or General Levies on it. So very little flexibility in moving the price for farmers...

 

[roskii]

unregulated means selling price is not set by government - so the difference between the cost of the fuel that the station buys vs their selling price (the margin) is not fixed. This means competition on the margin which reduces the cost you pay.
Now - tax levels on the fuel is another story - and that contributes to the high price.

edit: so in principle (someone correct me if wrong) - there is no reason a fuel station cannot sell diesel at R1 a litre and take a massive loss.

100%

You can buy it for quite a bit cheaper at selected garages or at the depot if you want to.

Risk you take is whether you are buying 100% diesel. 'Spiking' is a massive issue in SA whereby up to 20% of the diesel is blended with IP (R10.44 wholesale at the Coast). You won't notice it in the short run, but eventually you'll stuff up your engine. This is why it is always worthwhile filling up at a major / large (well-known) independent as they have strict supply controls.

 

[WollieVerstege]

unregulated means selling price is not set by government - so the difference between the cost of the fuel that the station buys vs their selling price (the margin) is not fixed. This means competition on the margin which reduces the cost you pay.
Now - tax levels on the fuel is another story - and that contributes to the high price.

edit: so in principle (someone correct me if wrong) - there is no reason a fuel station cannot sell diesel at R1 a litre and take a massive loss.

I actually know of one service station in the Cape Town that does, but only to select customers.

 

[Swa]

Isn't diesel unregulated? If it is, it is not much cheaper?

Read the article. The retail price is unregulated but the wholesale price or cost price for the station isn't. That's why it isn't much cheaper because it's not fully regulated.