Government starts the process to deregulate the petrol price.

By Lehlohonolo Lehana.

Government has started with it’s plans to de-regulate the fuel sector and lower fuel prices.

On Friday, energy minister Gwede Mantashe published a brief notice on page 106 of the weekly Government Gazette, asking for comment on his “intention to introduce a price cap” for 93 octane.

That starts a 30-day period for public input, before the process can move further forward.

Mantashe’s signature is dated 30 June, which means he has been sitting on the notice for three weeks. 

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Even so, the request for comment was apparently published in some haste, with details on how comments can be submitted on the following page, rather than included as part of the notice.

Moving to a maximum price, or price cap, would allow petrol retailers to discount fuel however they see fit, with price specials, bundles, or volume discounts.

At present, the exact price of petrol is set by the government and it is illegal to sell petrol at any other price.

Mantashe provided no detail on how a price cap would be calculated, when it would be implemented, or how it would be enforced. 

Proponents of deregulation have long argued that allowing petrol discounts would bring price innovation to the market.

Fuel retail costs have surged by 36% since the start of the year, increasing calls by opposition parties and labour groups for the government to deregulate the price. 

The Democratic Alliance has announced plans to introduce a new private members bill to parliament that will de-regulate the fuel sector.

The opposition party said the focus of the bill will be to amend the existing Petroleum Products Act – specifically provisions in section 2 of the legislation which deals with the regulation of the fuel sector by the minister of energy.

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