Mantashe says fuel levy reduction won't be extended beyond May
- Published on 23 May 2022
- HR Pulse News Desk
Department of Mineral Resources and Energy Minister Gwede Mantashe has indicated that the temporary reduction in the general fuel levy won't be extended beyond the end of May.
The levy was cut by R1.50 a litre for April and May as government sought to relieve the economic stress of surging fuel prices. When asked on Thursday whether the levy cut would be extended beyond May, Mantashe said it would not – although his department still needed to consult with National Treasury “to [see] if there can be anything more that we can do."
At the current oil price and rand levels and without the levy cut being extended, petrol may be hiked by more than R3.50 in the first week of June. According to Johann Els, chief economist at Old Mutual Investment Group, if the petrol levy cut isn’t maintained beyond May, consumer inflation may reach 6.8% to 7% in June.
With consumer inflation around 7%, and with the combined effect of higher interest rates, workers won’t be happy with salary hikes of 5%, warned Johann van Tonder, economist at Momentum Investments. In his view, “this will fuel even larger wage demands than what are currently seen, leading to more strikes in the end."
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Source: SA Labour News
