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Energy Department to see how it costs the basic price of fuel

The Department of Energy has invited public comments on how to calculate the basic prices of fuel, diesel and paraffin lighting, known as the Basic Fuel Price.

This is the price of fuel before adding taxes, transport and other costs.

In a discussion paper published in a government paper last week, the department is calling for a public call for a base fuel price before the end of January next year.

BFP is one of the four elements that make up the pump price of fuel in South Africa. Others are a general purpose for fuel, the price and distribution of funds for road accidents, transport and wholesale costs.

The document includes a number of proposed changes to the formula it uses to calculate the BFP, from a change in the reference markets it uses to calculate import costs, to reducing the number of days when refiners need to store fuel in the repository.

While Energy Minister Jeff Radebe said his department is also a pexploring the possibility of determining a cap on the price of fuel, this is not included in the document.

The Energy Department said it predicted that the revised formula for a fuel price base would be implemented in 2019 after "detailed consultation with all wholesalers". Do not give a more specific date.

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