The Automobile Association says that finance minister Pravin Gordhan’s announcement that an additional 30 cents per litre is to be added to the general fuel levy for the second year in a row, as well as an additional nine cents to the Road Accident Fund levy, is “cause for great concern”.
The AA was commenting after the minister made the announcement in his annual budget speech on Wednesday. The additional charges will come into effect on 1 April.
The Association said that the additional 30 cents per litre means that motorists will soon be paying R3,15 towards the fuel levy for every litre of fuel they put into their vehicles, and an additional R1,63 per litre for the RAF levy.
“Effectively this means that for every litre of petrol, motorists are paying R4,78, or 35%, 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,” the AA said in a statement.
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 per litre and R13,39 per litres, respectively. 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 added that the latest increase comes amid widespread apathy towards other taxes on motorists, for instance, the funding model of the Gauteng Freeway Improvement Project.
“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,” the AA said.
“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 added.
The Association concluded that the time is right “for a review of the fuel and RAF levies”.