The Western Cape may become the first province to introduce a fuel levy in 2006 after the provincial cabinet approved the proposal earlier this week.

The Western Cape may become the first province to introduce a fuel levy in 2006 after the provincial cabinet approved the proposal earlier this week.

The fuel levy proposal will now be passed on to finance minister Trevor Manuel for approval. Once implemented, it is estimated that the proposed 10 cents a litre tax would add R300 million to the province's coffers annually after its introduction in 2006.

Lynne Brown, local MEC for finance and economic development, said the province's social partners agreed to introduce the levy once it had been through a public participation process.

The plan was outlined in Brown's mid-term budget adjustments which detailed the province's revised spending for 2005 and 2006.

The director of the Cape Town Regional Chamber of Commerce and Industry, Albert Schuitmaker, said the organisation would support the levy if it were dedicated to the maintenance and improvement of the road system and the upgrading of the public transport infrastructure.

The chamber saw the levy as an alternative to additional toll roads and hoped it would curtail the high motor licence fees in the Western Cape. These fees are among the highest in the country and are already more than double the fees in the Eastern Cape.

Schuitmaker said it would be unacceptable if money raised from the levy were used for the general revenue of the province.