As neighbouring SA announces a decrease
MASERU – Fuel prices will remain unchanged until December, notwithstanding a recent decrease in neighbouring South Africa recently, with both government and the Petroleum Fund unsure of what steps to take in the wake of a possible global fall of oil products prices. As of June 04, Petrol 93 increased by M3.00 per litre and now costs 23.70, petrol 95 with M3.20 making it M24.15 per litre, diesel M0.75 and costs M24. 55 while the M1.10 hike in paraffin left it at M18.90 per litre.
But government, the same month, subsidised the increasing fuel prices by M1.50 and paraffin by M1.10 beginning July to December this year. Minister of Energy, Mohapi Mohapinyane, said this was done in collaboration with the finance minister and in accordance with the Fuel and Services Control Act of 1983 (1) (a) – and meant to cushion Basotho from high fuel prices.
The government said they have set aside M30 million monthly to manage fuel prices and cushion oil companies so that they can keep prices constant for six months in a bid to reduce the burden of high prices on consumers. As per government’s new arrangement until December, Basotho would spend, fixed for six months, M22.20 per litre for petrol93, M22.65 for a litre of petrol95, M23.20 per litre of diesel50 and M17.80 for a litre of household paraffin. The agreement has been made provided oil prices do not exceed M1.60.
Changes in the Southern African Customs Union region are being monitored by a committee made up of the Ministry of Energy, Petroleum Fund, Office of the Auditor-General and the Accountant General, with an undertaking that should there will be any variations in the situation, necessary measures will be taken. But as things stand at the moment, following a decline in prices in South Africa, it remains unclear what should happen after the drop and should there be a further decrease before December. Government and the Petroleum Funds told Public Eye the matter is yet to be addressed.
Speaking to this publication, government spokesperson Tšoinyana Rapapa, said the decision on the way forward should prices continue to drop between now and December has not been made or even considered. He said since the current arrangement has been put in place until December, it can only mean that consumers will, therefore, continue to pay M1.60 less for each litre of fuel.
“This arrangement was done to address escalating fuel prices. Nothing was said about what ought to happen in case prices dropped, therefore, I believe consumers will continue to benefit until December,” Rapapa stated. On the other hand, Rapapa said if oil prices exceed the subsidised amount, consumer would have shoulder extra costs. In a separate interview, Petroleum Fund’s Public Relations Officer, Rorisang Mahlo, also noted that it is not yet clear what will be done.
He, however, stated that he believes that the tripartite committee monitoring the prices situation will determine a way forward basing themselves on the oil prices’ fluctuation. The committee meets monthly. “I am not in a position to say whether consumers will still pay M1.60 less for their fuel per litre per government subsidy or they will pay for their own oil in case petrol prices drop. “I believe this committee will be the one that will advise the government on the way forward,” he added.
During the period in question, the Petroleum Fund has advised retailers to sell petroleum products to consumers at the authorised prices and failure to do so will call for legal action taken against such retailers. Meanwhile, the South African department of mineral resources and energy recently announced a decrease in oil prices for the month of September. The new South African prices, which came into effect on Wednesday September 7, dropped by M2.04 per litre for both 93 and 95 petrol – while illuminating paraffin dropped by 82 cents per litre.