How is Brexit Affecting South Africa after an Election and a Resignation?

Monday the stage was set for the two main parties in Britain to start their battle over a no-deal Brexit in the hopes that they will be able to win back those voters that left them for the new movement led by Nigel Farage and other smaller parties in the European elections. 

So what does this new turn of events hold for South Africa? In regards to creating a new trade regime that will allow South Africa a soft landing from Brexit, Britain is holding the ball right now according to the Department of Trade and Industry. 

In both countries it has been an eventful month. In South Africa the fifth government administration was dissolved in order to make way for general elections and in the UK, Theresa May announced her resignation a week ago. 

Spokesman for trade and industry, Sidwell Medupe said that trade relations between SA and the UK has gone unchanged. They are still in discussions with their British counterpart, that is led by George Hollingbery. 

However, in an attempt to improve government efficiency, President Cyril Ramaphosa announced that the Department of Trade and Industry would be merged with the Department of Economic Development. This will then mean that the remaining engagement will most likely be led by Minister Ebrahim Patel.

Medupe went on to say that South Africa is trading with the UK in accordance to the partnership agreement with the EU and that trade is governed by the economic partnership agreement. 

The UK is still part of the EU and in regards to the agreement their have been negotiations between the two countries with the aim of minimising any disruptions that may come from Brexit. 

The engagements with Hollingbery will not be affected by the resignation of May. Once the UK has left the EU they will be considered the UK and the aim is for South Africa to try and create an agreement before they leave. Medupe also said that these discussions are continuing but they are in an advanced phase. 

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Carbon Tax Eats into Petrol Price Cut for June

Over the past month with the South African rand and the international oil prices, petrol prices have been on the rise and now the dust has settled for June’s fuel price. This month it seems that the petrol price will remain stable according to the Automobile Association, who is actually predicting a price decrease of around 1 cent based on the month end data that was released by the Central Energy Fund. However, diesel will probably go up by about 24 cents a litre. 

This then means that 93 Unleaded inland will be about R16.47 and 95 ULP will be about R16.66 inland and R16.02 at the coast. 

However, these prices are not under normal circumstances as in fact petrol would have decreased by about 10 cents a litre and the hike on diesel would have been limited to 14 cents. The new Carbon Tax that was announced in the February Budget Speech has eaten up the decrease. This Carbon Tax is set to kick in at the beginning of June, which adds 9 cents to petrol per litre and 10 cents per litre for diesel. 

Of course the carbon tax has been highly criticised and Heinrich Volmink, executive head of The Organisation Undoing Tax Abuse said that a carbon fuel levy that doesn’t have a clear showing that it will be used specifically for climate change seems to be deceitful. 

The fuel price situation is not set in stone and will continue to unfold in the months to come as there are a number of issues that could impact oil prices further in 2019 and the AA has warned for further economic storms ahead. 

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