by Ntandoyenkosi Ncube

JOHANNESBURG, April 30 (Xinhua) -- South Africa's temporary fuel levy reduction offers meaningful short-term relief for consumers but will not be enough to offset broader fuel price volatility and structural weaknesses in the country's energy system, Johannesburg-based energy economist Lungile Mashele has said.

The extension of the fuel levy cut will help cushion households in the near term, as South Africa remains highly exposed to global oil market fluctuations, she said.

"The 3-rand-per-liter reduction in the general fuel levy is significant as it puts more money in the hands of consumers, reduces transport costs, and helps ease inflationary pressure," Mashele told Xinhua in a recent interview.

"However, with the ongoing crisis and fuel price volatility, it will not be enough to stave off the true impacts."

While such measures can stabilize prices temporarily, they do not address deeper vulnerabilities in South Africa's fuel supply system, Mashele said.

"In the short term, there are no alternatives apart from the fuel levy. In the long term, South Africa needs to consider energy sovereignty and security," she said.

Mashele highlighted the need for greater investment in domestic oil and gas exploration, particularly offshore in the Orange Basin, where neighboring Namibia has already reported major discoveries. She said most of the basin lies within South African territory.

"We need to invest in upstream oil and gas activities off our shores," she said.

Mashele also pointed to the importance of expanding access to affordable clean cooking and off-grid energy, especially for low-income households. She warned that recent fuel price increases had disproportionately affected vulnerable communities.

"When petrol and diesel prices increased on April 1, paraffin prices more than doubled. More than 600,000 people in South Africa use paraffin for cooking and lighting," she said.

South Africa's reliance on imported fuel leaves it highly exposed to global oil prices and exchange rate fluctuations, Mashele said.

"By not investing in domestic capacity like Angola, Nigeria, Gabon, Mozambique, and Namibia, we are importing volatility and inflation into our economy through fuel, food, medicines, clothing, cars, and electronics."

She also cautioned that repeated use of fuel levy reductions could strain public finances, as the levy is an important source of government revenue.

Any shortfall in revenue must be covered through alternative measures, including potentially drawing on strategic fuel reserves, Mashele said.

Fuel levy cuts have historically helped soften price shocks but cannot serve as a long-term solution, she said.

"A 7-rand-increase will always be better than a 10-rand-increase. Once the initial shock has been absorbed, it is easier to reintroduce the fuel levy."

South Africa could learn from countries such as Guyana, Nigeria, and Brazil, where increased oil production and exports have helped reduce exposure to global price swings and strengthened national finances, Mashele said.

"However, this requires political will, investment, and clear strategic intent," she said, warning that without structural reform, South Africa will remain vulnerable to recurring fuel price shocks and external economic pressures. ■