Cape Town – Finance Minister Pravin Gordhan has announced fuel levy hikes in his Budget Speech on Wednesday (Feb 22).
An additional 30 cents/litre will be added to the general fuel levy for the second year in a row, and an additional nine cents a litre is to be added to the Road Accident Fund (RAF) levy.
The additional charges come into effect on April 1 2017.
Points motorists can take from Gordhan’s speech:
• An increase of 30c/litre in the general fuel levy and 9c/litre in the road accident fund levy.
• The Provincial Roads Maintenance Grant is allocated R10.8-billion in 2017/18, taking into account the increase in road traffic volumes.
• Sanral receives R15.4-billion over the period ahead for strengthening and maintenance of the national road network, which now stands at 21 946km.
• The development and operation of integrated public transport networks, funded through the Public Transport Network Grant receives R6.2bn in 2017/18.
It all adds up
The Automobile Association (AA) said the increases is “cause for great concern”.
The AA said the additional 30 cents/l means that motorists will now be paying R3.15 towards the fuel levy for every litre of fuel they put in their vehicles, and additional R1.63/litres for the RAF levy.
The AA said:“Effectively this means that for every litre of petrol, motorists are paying R4.78, or 35 percent, on indirect taxes. This is a huge amount, and calculated on a 50 litre tank of fuel amounts to R239. South Africans already buckling because of the weak economy will now have dig even deeper in their pockets. This at a time when many are questioning government spending.”
Using the current price of a litre of 93 unleaded fuel of R13.38 inland, and R13.00 at the coast, the increases will push the price to R13.77/litre, and R13.39/l. This, of course, is dependent on the monthly changes to the fuel price. However, using the current figures, filling a 50 litre tank of petrol will cost R688.50 (inland), and R669.50 at the coast.
The association noted this increase comes amid widespread apathy towards other taxes on motorists, for instance, the funding model of the Gauteng Freeway Improvement Project (GFIP).
The association said: “We have long called for a portion of this fuel levy to be ring-fenced and used for projects such as Gauteng’s e-tolls. But the money collected through this levy does not go towards this, although it makes sense to do so. Instead motorists must pay extra taxes for the use of the roads.”
“Motorists remain easy targets for revenue collection although many are suffering as a result of increases to the fuel price. This is particularly prejudicial to motorists especially in the context of a lack of proper, reliable public transport.”
“Hundreds of thousands of commuters rely on their vehicles to get to and from work daily. And, these increases will not only impact on transport costs – including things such as bus and taxi fares – but are also putting inflationary pressure on other commodities that rely on road transport to be delivered across the country,” the AA noted.
The Association said it believed the time was right for a review of the fuel and RAF levies.