The Automobile Association of South Africa has warned that it is ready to escalate action if upcoming fuel price hikes are pushed higher by taxes rather than global oil prices. The warning comes as South Africans brace for sharp increases in petrol and diesel prices linked to supply pressure from the war in the Middle East.

According to IOL, AA CEO Bobby Ramagwede said the association does not expect an extreme increase if South Africa’s strategic oil reserves are available and can be used to cushion the blow. He said that, in that case, the increase may stay to around R1. But if the reserves are low or unavailable, local prices could rise further because South Africa would be more exposed to global supply shocks.

Strategic Reserves Back in Focus

Ramagwede said South Africa sold all of its strategic oil reserves in 2016, although government has since said those reserves were repurchased. He argued that these reserves exist for moments exactly like this, when global disruptions threaten to hit households and businesses hard.

Fuel hikes also feed into transport costs, food prices and the wider cost of living. The AA’s message is that government should now use every tool available to limit the damage. This includes looking closely at the tax portion of the fuel price.

Threat of National Highway Blockades

Ramagwede said special circumstances require special action. He called on the state to adjust levies and taxes so that consumers are not hit with what he described as a shock to the system. He also said the AA is prepared to mobilise larger fuel users, including towing and taxi associations, if that does not happen.

In the strongest warning, he said the AA is prepared to block national highways until government makes changes to the tax component of the fuel price. That raises the pressure on the state to clarify the status of the country’s reserves and explain what relief, if any, is on the table before the next fuel price adjustment lands.