Energy Minister Jeff Radebe says the department is intensifying efforts to cap and bring down the escalating cost of fuel.
After OPEC took a decision to remove 2% of the global oil production to support higher oil prices, oil prices have more than doubled in two years and this year, crude oil prices currently stand at US$80 per barrel.
To a large degree, Radebe said, OPEC has achieved their objective to the detriment of petroleum consumers globally. Radebe said high oil prices can also be attributed to geo-political instability. The recent political turmoil in Venezuela, which has led to a near collapse of oil production in that country, has had a dire effect on the global market. Radebe said this was the case in Libya following the change of government in 2011, which has led to that country going from producing 1.5 million barrels per day to an average of 600 000 barrels per day. Markets have also had to factor in the decision by the United States in May to withdraw from the Joint Comprehensive Programme of Action (JCPOA), which was signed with Iran, and the US’s threat to impose sanctions on Iran – which will include punitive measures on Iranian oil and gas in the form of an embargo on oil and gas exports. But Radebe told MPs on Tuesday that government’s focus was on interventions that are aimed at turning the situation around. “There are technical teams from the Department of Energy and National Treasury that have started to work on the review of the fuel price structure, as indicated by the President about two months ago… to see whether there can be any adjustments that can be made. “We have to finalise the framework for the exploration of oil and gas [so that] we can have better control of fuel prices through domestic production of fuel and gas.”