Big announcement about petrol price in South Africa

President Cyril Ramaphosa announced that the fuel price formula will be reviewed to identify where prices can be reduced.

This was one of the interventions Ramaphosa announced as part of its opening of parliament address on Thursday.

Ramaphosa said one of the key priorities of the Government of National Unity (GNU) is to tackle poverty and the high cost of living.

“An effective, integrated, and comprehensive poverty alleviation strategy is necessary to protect and support society’s most vulnerable,” he said.

He said that at a time when many companies were making large profits, millions of South Africans were suffering because of rising prices.

To address this issue, the Government of National Unity will look to expand the basket of essential food items exempt from VAT.

It will also “undertake a comprehensive review of administered prices, including the fuel price formula, to identify areas where prices can be reduced”.

How the formula will be changed to reduce petrol, diesel, and paraffin prices is unclear.

During his address, Ramaphosa focussed heavily on inclusive growth, which goes beyond making food and fuel more affordable.

He said asset poverty is one of the underlying causes of abject poverty, which exacerbates the high cost of living among our people.

“The provision of title deeds for land and subsidised housing provides people with assets that they can use to improve their economic position,” he said.

The government will further use the SRD Grant as the foundation to introduce a sustainable form of income support for unemployed people.

Ramaphosa further said the new government will manage public finances with a view to stabilising debt.

“We are firmly committed to steadily reducing the cost of servicing our debt so that we can redirect funds towards other critical social and economic needs,” he said.

Operation Vulindlela

Ramaphosa announced the launch of the second phase of Operation Vulindlela, a government-wide initiative that has been essential in supporting and driving reform.

In its second phase, Operation Vulindlela will focus on reforming the local government system.

It will also aim to improve the delivery of basic services and harness digital public infrastructure as a driver of growth and inclusion.

It will also focus on accelerating the release of public land for social housing and redirecting the housing policy to enable people to find affordable homes in areas of their choice.

Another focus area was electricity. “We will complete the most consequential transformation of South Africa’s electricity industry in more than a century,” he said.

“Since the announcement of the Energy Action Plan in July 2022, we have made tremendous progress in reducing the severity of load shedding.”

Over the next five years, the government will focus on expanding and strengthening the transmission network.

He added that inclusive growth requires an efficient freight rail network to carry minerals, agricultural produce and manufactured goods to market.

“By implementing the Freight Logistics Roadmap, we will continue with reforms to transform South Africa’s freight logistics system,” he said.

“The work we are doing with business and unions through the National Logistics Crisis Committee has already contributed to improvements in the operational performance of freight rail and ports.”