Department of Energy to review how it costs basic fuel price
The department of energy has invited public comments on how it calculates the underlying prices of fuel, diesel and illuminating paraffin, known as the Basic Fuel Price (BFP).
This is the price of fuel before taxes, transport, and other costs are added.
In a discussion document published in the government gazette last week, the department calls for public input on the Basic Fuel Price before the end of January next year.
The BFP is one of four elements that makes up the pump cost of fuel in South Africa. The others are the general fuel levy, the road accident fund levy and distribution, transport and wholesale costs.
The document includes a number of proposed tweaks to the formula it uses to calculate the BFP, from changing the reference markets it uses for calculating import costs, to reducing the number of days that refiners have to keep fuel in storage.
While Minister of Energy Jeff Radebe has said his department is also researching the possibility of fixing a cap to the fuel price, this is not included in the document.
The department of energy said it envisions that the revised Basic Fuel Price formula would be implemented in 2019 after “extensive consultations with all wholesalers”. It did not provide a more specific date.
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