For the tax year ended March 31, the South African Revenue Service collected R1.56-trillion in net taxes, consisting of R1.88-trillion less refunds of R321.1-billion, which equates to 17.04% of the total. The net collection amounts to R4.28-billion a day. Remember this number.

The day before this announcement, the National Treasury and the Department of Mineral Resources and Energy (DMRE) had issued a media release announcing “short-term relief measures to address fuel price increases”. What constitutes ‘short term’? It should be ‘short run’, as it is used in an economic context. In economics, ‘short run’ is considered a period of four to six months. So now you have an expectation of the duration of the fuel price relief.

The media release states: “Extensive consultations have been held between the National Treasury and the DMRE, as announced in the 2022 Budget, to explore measures to provide short-term relief to consumers and to reduce fuel prices over the medium term.” There is no medium term in economics, but the medium run is anything between 10 and 25 years. I would venture to guess that your expectation of the duration of the fuel price reduction has now increased by about the same margin.

So, what is the extent of the relief: ‘short term’ or ‘medium term’? “A ‘two-phase approach’ was agreed, consisting of an immediate intervention for the next two months, and a package of measures to reduce prices when the temporary measures come to an end after two months. “This is in addition to announcements made in the 2022 Budget, where no changes were made to the general fuel levy and the Road Accident Fund levy, providing tax relief of R3.5-billion.” Interestingly, ‘saving’ consumers because they are not taxed more!

Phase 1 calls for a temporary general fuel levy reduction of R1.50/𝓵 from April 6 to May 31. Not quite two months then? Interestingly, April 6 this year is called epiphany, meaning a moment of sudden and great revelation or realisation. It used to be Founders Day, while May 31 used to be Republic Day.

The release continues: “It is estimated that the partial reduction in the fuel levy will cost about R6-billion in foregone tax revenue for the two-month period.” Now recall the tax revenue number of R4.28-billion a day. But wait for it: “The Minister of Mineral Resources and Energy proposes that the revenue foregone be recouped through a sale of strategic crude oil reserves held by the Strategic Fuel Fund (a subsidiary of the Central Energy Fund). “The sale would be required to raise about R6-billion.” Selling the family silver? How will the strategic crude oil reserves ever be replenished, and at what future cost?

Phase 2 will see “the following package of additional measures to be introduced after the expiry of the temporary measures from June 1: a) A reduction in the basic fuel price of 3c/𝓵 . . .; b) the termination of the Demand Side Management Levy of 10c/𝓵 on 95 unleaded petrol sold inland; c) the introduction of a price cap on 93 octane petrol, [which] will allow retailers to sell at a price below the regulated price; d) the termination of the practice to publish guidance by the DMRE on diesel prices to promote greater competition; and e) the Regulatory Accounting System (including the retail margin, wholesale margin and secondary storage and distribution margins) will be reviewed to assess whether adjustments can be made to lower the margins over the medium term. Interventions will be considered by the DMRE to reduce the price pressure for illuminating paraffin over the medium term.”

What has really happened? You would have noted what is essentially the first step in the deregulation of South Africa’s petrol price. This would quite possibly see major retailers entering the fuel market, which they have long desired to do.