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Johannesburg - The government will start regulating the sale of gas, in the same way petrol is regulated.
South Africans' cries of distress have resulted in government taking steps to start regulating the price of gas, says Muzi Mkhize, director of hydrocarbon activities at the Department of Minerals and Energy.
"While the cost of gas at the refinery gate is regulated, there is currently no limit to what dealers may charge consumers for gas."
Robert Maake, also connected to the department, says that poor consumers receive no price benefit from existing mechanisms to keep the price of gas low.
"There is, for instance, a zero-rate VAT levy applicable to gas, but the only ones benefiting from this are the wholesalers. Government will now step in to ensure that poor consumers again receive this benefit."
The refinery gas price has fallen dramatically over the past six months. This price is linked to that of fuel.
Whereas 1kg of gas cost around R9.46 on July 2 last year, the price has now dropped to around R3.73/kg. This is the price that wholesalers pay the gas refineries.
Anton Moldan, an environmental adviser for the SA Petroleum Industry Association, says dealers are not currently obliged to adjust their prices when the refinery price is reduced. LPG is like diesel; retailers can price it as they wish.
In general consumers have not yet seen the impact of this on gas prices.
Mkhize says the new regulations will penalise dealers who fail to comply with the regulations, which will be much like the existing prescriptions governing petrol.
- Sake24.com
For more business news in Afrikaans, go to Sake24.com.