Stop petrol price-fixing: PnP

This comes as petrol pump prices are set to increase by 17c or 2.3% to R7.64 per litre for all grades as of midnight on Tuesday.The wholesale price of diesel will also go up by 7c to R7.32.

"Global oil prices have reached a record high and South African consumers - already very hard-pressed with interest rate increases and growing inflation - are facing the brunt of these price hikes. The irony is that this isn't altogether necessary," said Ackerman in a statement.

Ackerman said petrol remains the only commodity to enjoy state-controlled pricing, "with all other mandated prices and Boards of Control already done away with, which is entirely appropriate".

"The question remains why it is that petrol is still so heavily regulated," said Ackerman. "The argument up until the early 1990s was that fuel was a strategic commodity and therefore had to be the subject of heavy regulation to guarantee supply in a siege economy. That's hardly the case today and there remain very few arguments which hold any water whatsoever.

"Yet another was that service station attendants would lose their jobs because of self-service. Again, an agreement by all fuel retailers to retain self-service to preserve jobs for a period of 5 years would allow for an adjustment."

Long battle

Pick n Pay first tackled the issue petrol price-fixing in 1975, sparking the biggest row the South African fuel industry had ever seen, said Ackerman. "At the time, we managed to get an agreement to cut the price of petrol. This was permitted for a period of time, until complaints from vested interests caused Government to pass strenuous legislation to stop us."

That fight lasted ten years until 1985, when Pick n Pay's attempt to introduce self-service at lower petrol prices was arbitrarily outlawed by government, followed by a directive to the oil companies to stop supplying Pick n Pay.

"Understandably, we were defiant, and tried to find another way to discount through a coupon system," said Ackerman. "This argument found its way into the judicial system, with the court ruling in Pick n Pay's favour. In the 1980s and 1990s, we held our prices of fuel until our tanks were dry whenever a price increase was announced. We did it because it's the ethically correct thing to do.

"We had bought petrol at a certain price and did not think profiteering just because the government-controlled price went up at a certain time on a certain date was correct. We still believe this. We were stopped from doing this too, and in one case, I was threatened with arrest, which of course I accepted as a risk."

Ackerman said Pick n Pay's stance on price fixing and monopolies is "born of a fundamental belief in the free market, and the benefits for consumers that accrue from vigorous competition". He said this is "particularly the case in a developing economy, where growth is at the top of the agenda, particularly now".

"When our new democracy came into being, there was much welcomed intent of market liberalisation and deregulation within industry, and this to a substantive degree has happened, with all due credit to our government.

"I think it's safe to say that the Competition Tribunal hearings held a few years ago on a proposed oil industry merger caused a great deal of embarrassing information to enter the public domain about the industry and how it operates. Issues such as the outdated and now almost ridiculous MPAR [marketing of petroleum activities return] system became a matter of detailed public record."

Ackerman said any deregulation of a basic commodity "is always great for consumers, who buy fuel as regularly as groceries. And ultimately, what's good for consumers is good for South Africa. This is in government's hands and it is totally within their power to fix."

- Fin24