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Speaker 1: Marathon meetings took place earlier this week at the instruction

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Speaker 1: of President Sourrama, passa between amongst others, Mineral and Petroleum Department, DTIC,

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Speaker 1: Treasury and Energy as well to try and mitigate against

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Speaker 1: the price of fuel that was announced to be increased

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Speaker 1: of course come the first of April. What was decided

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Speaker 1: upon is that there will be a suspension of half

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Speaker 1: of the fuel and ref levy that had been announced

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Speaker 1: by the Finance Minister when he delivered his February budget

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Speaker 1: speech and that is in place until the sixth of May.

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Speaker 1: That cushion't just a little bit the increase in the

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Speaker 1: price of petrol. Selli Summacoberla is the Deputy Director General

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Speaker 1: for Mineral and Peatorium Regulation at the Department of Mineral

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Speaker 1: and Resources, joining me on the line out Sady, Sorry,

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Speaker 1: very good afternoon and welcome to the show.

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Speaker 2: Good Afternon Africa and to Cape tok List.

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Speaker 1: I imagine the Finance Minister will want those levees to

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Speaker 1: go back as soon as possible because he will be

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Speaker 1: losing six billion round in text revenue this month for

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Speaker 1: the relief obviously that has been afforded. What other avenues

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Speaker 1: are available to government do you think that is so

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Speaker 1: that will cushion future increases in the price of fuel.

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Speaker 2: So firstly, let me thank you for this opportunity. We've

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Speaker 2: been asked to look at all range of issues, all

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Speaker 2: range of interventions to basically you know, cushion the consumer

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Speaker 2: beyond just the you know, fuel price intervention. So we

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Speaker 2: are looking now at a range of other interventions that

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Speaker 2: can be presented to the ministers. You did indicate that

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Speaker 2: it's five ministers. I think the fifth one is the

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Speaker 2: Minister of Transport. So a team is working on that.

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Speaker 2: But we believe that I mean, this intervention that has

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Speaker 2: been put forward by a Minister of silence goes a

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Speaker 2: long way. And I want to just perhaps in the introduction,

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Speaker 2: I just want to say that it's early days now

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Speaker 2: for anyone of us to make predictions about what is

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Speaker 2: going to happen at the end of at the end

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Speaker 2: of April in terms of price. So yeah, but we

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Speaker 2: are working on a number of you know interventions. I mean,

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Speaker 2: one of them is that we you know, there is

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Speaker 2: a view that there must be you know, a way

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Speaker 2: of making sure that you know, food security is ensured

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Speaker 2: in terms of you know, going forward, because the price

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Speaker 2: of diesel does have a direct impact on farming.

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Speaker 1: Would that include then regulating the price of diesel because

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Speaker 1: it is one of the fuel types that is not

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Speaker 1: regulated by government, So what we.

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Speaker 2: Have you know, in a time like this, we advise

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Speaker 2: against introducing new regulation because you then, you know, create

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Speaker 2: some uncertainty for those people that have to import products.

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Speaker 2: So the first priority for you know, a regulator in

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Speaker 2: times like this is to make sure that product can

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Speaker 2: flow into the country so that we never run dry

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Speaker 2: as a country. So we don't think radulating diesel at

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Speaker 2: this point is the right thing to do. But then

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Speaker 2: we have to look at what can we do to

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Speaker 2: prevent the gouging that we saw, What can we do

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Speaker 2: to prevent the stocking stocking up that we saw which

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Speaker 2: then led to the shortages that we saw in most

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Speaker 2: service stations on diesel.

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Speaker 1: The number of factors that go into determining the price

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Speaker 1: pelletal of petrol or diesel. There's obviously the global oil

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Speaker 1: prices and rend crude, and we know that the geopolitical

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Speaker 1: tensions in the Middle East astaly in you know, placing

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Speaker 1: a lot of pressure on that. The exchange rate between

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Speaker 1: the rand and the US dollar, and often we have

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Speaker 1: no control over what that exchange rate might be. An

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Speaker 1: element that we have control over, as indicated by a

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Speaker 1: decision taken by government ahead of the price increase on

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Speaker 1: the first of April, is a road accident fund as

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Speaker 1: well as the level for that, as well as the

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Speaker 1: general fuel levy. The retail whostal margins obviously have to

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Speaker 1: be then in order for those who operate and own

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Speaker 1: petrol stations to continue to make some money from the

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Speaker 1: sale of petrol. And when I look at that formula,

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Speaker 1: and I know it's more complex and more nuanced than

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Speaker 1: that city. So it really does come down to those

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Speaker 1: levees that government is able to charge us as a

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Speaker 1: form of tax for a later of petrol, and very

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Speaker 1: little else that you can maneuver.

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Speaker 2: Indeed, I think, okay, maybe let me address, at the

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Speaker 2: risk of being called order by treasure, the road accident

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Speaker 2: fund levy is air marked, and so you know, it

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Speaker 2: becomes difficult, you know, for any you know, intervention to

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Speaker 2: go into that levey. But of course the Minister of

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Speaker 2: Finance has gone into the fuel levee and then reduced

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Speaker 2: that levee by the seventy percent. So what remains of

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Speaker 2: that levee now is thirty percent that we are paying,

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Speaker 2: so you are correct. I think our pricing, contrary to

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Speaker 2: opinions that some people may have, is very competitive. You know.

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Speaker 2: We compare very well even to most of our trading partners,

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Speaker 2: except of course, the oil pro using countries. We can't

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Speaker 2: compare ourselves with those, so there's very little room to

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Speaker 2: wiggle on the on the formula that we have for pricing.

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Speaker 2: That's true. So we are now suffering because of the

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Speaker 2: crudal price, which we have no control over as well.

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Speaker 1: I imagine an additional challenge is that we have seen

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Speaker 1: a reduction of refinery capacity in South Africa for a

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Speaker 1: number of reasons over the last decade, which means we

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Speaker 1: do need to buy refined fuel that is mainly coming

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Speaker 1: from Iran in the Middle East, and of course, with

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Speaker 1: the Strait of Homus being compromised the way it is,

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Speaker 1: it does make it difficult. Had we had improved refinery capacity,

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Speaker 1: we could surely purchase oil from Angola and from Nigeria

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Speaker 1: refine it ourselves for our own consumption, couldn't we.

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Speaker 2: So let me just indicate that we no longer get

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Speaker 2: any oil or refined products from Iran. At the stage,

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Speaker 2: and that was the case since twenty twelve. But however,

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Speaker 2: like gold and platinum and all other commodities, oil and

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Speaker 2: petrolum products are dollar denominated. So if you go to

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Speaker 2: an Angola and you know, try and import oil, they're

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Speaker 2: going to price it, you know, in dollar terms, and

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Speaker 2: that's currently what is happening. We are importing sixty percent

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Speaker 2: of oil from the African continent and they sell it

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Speaker 2: in dollars because you know, one of the arguments that

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Speaker 2: they'll say is that really sell us platinum at a discount,

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Speaker 2: And you know that those are the kinds of conversations

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Speaker 2: at oil using nations. Actually, when you try and get

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Speaker 2: favorable terms, they then engage you with those kinds of responses,

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Speaker 2: and they are costs associated with extracting oil as well,

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Speaker 2: and that they have to take into account.

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Speaker 1: That's good to hear. Actually, that is I had no

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Speaker 1: idea that we haven't been importing from Iran for a

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Speaker 1: number of years now, because it means that the supply

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Speaker 1: of oil then will never be in question. It will

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Speaker 1: just be a factor of the price that is determined

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Speaker 1: in a majority way by rencrude pricing per barrel, as

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Speaker 1: well as the randoa exchange rate.

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Speaker 2: Well, let me say this that because we don't have

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Speaker 2: refine ouries, we were importing actually more than fifty percent

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Speaker 2: of our refined products from the countries in the Middle East.

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Speaker 2: UAE creates or mine as well as Saudi Arabia, so

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Speaker 2: we asked we are still exposed to that, but the

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Speaker 2: oil companies have diversified into India, Europe itself, your Brazil

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Speaker 2: and some of the you know of the products like

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Speaker 2: LPGR coming out of the United States.

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Speaker 1: Let me ask this as a final question, then, Sally

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Speaker 1: So a listener quite rightly asking are there any plans

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Speaker 1: to question the price of paraffine, which is widely used

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Speaker 1: by the poorest of our citizens. They had to enjoy

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Speaker 1: an eleven rando liter price increase which almost doubled at

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Speaker 1: the price pedita of paraffine, and that you will agree

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Speaker 1: it seems unfair.

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Speaker 2: So maybe before I let me just give a bit

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Speaker 2: of a background if I may. That paraffine tracks chatshure

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Speaker 2: so because they are similar. So whenever judge fuel increases,

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Speaker 2: paraffine will also increase. And there's a shortage now in

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Speaker 2: the world of judguel because of the countries in the

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Speaker 2: Middle East. That's why. Then paraffin is also going up,

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Speaker 2: and you know it has almost track has doubled. Now

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Speaker 2: what will what are we going to do? We've been

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Speaker 2: given that challenge and we have to to work on

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Speaker 2: it and come up with a solution to that, to

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Speaker 2: to that challenge. So we are hard at work trying

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Speaker 2: to see what can be done. Unfortunately, paraffine doesn't have

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Speaker 2: any taxes. They were all removed, you know, so you

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Speaker 2: can't even say you are cutting that or you're cutting

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Speaker 2: you know, so all of those were we're removed and

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Speaker 2: there's no room now to cut using taxis there are

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Speaker 2: other ways that you can enrich the consumers of paraffin

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Speaker 2: and make life easy for them, and those are the

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Speaker 2: ones that we've been asked to look at and provide.

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Speaker 1: Thank you well, you've got a lot of work ahead

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Speaker 1: for you and all those involved in the conversations ready,

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Speaker 1: so thank you very much indeed for your time. Sady

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Speaker 1: some Marcobela is the Deputy Director General for Mineral and

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Speaker 1: Petroleum Regulation with the Department of Mineral Resources, talking to

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Speaker 1: us about what avenues extremely limited available to government to

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Speaker 1: mitigate against the future increase in price of fuel