R6,11. It doesn’t sound like a lot of money, but this is what you pay towards taxes and fuel levies for every single litre of petrol or diesel that you put into your car. Yet it’s only when you consider the cost of a full tank that this excessive taxation hits home hard.
If you drive a Toyota Hilux or Ford Ranger, for instance, this means that every full tank comes with a taxation of R458,25 – assuming that you put 75 litres of diesel into its 80 litre tank. Of course, we did that sum merely to highlight how much tax per tank you could potentially pay. The tax is the same regardless of how big your tank is. But even the numbers for a small car like the Volkswagen polo are quite sobering. Put 35 litres into its 40 litre tank and you’ll be paying R213,85 in taxes, out of the R595 total, assuming you’re filling up with 93 Unleaded Petrol in an inland region.
According to the Automobile Association, the primary fuel taxes consist of the General Fuel Levy, at R3,93 per litre, and the Road Accident Fund Levy, at R2,18. A litre of petrol only costs R7,15 when it arrives at the harbour but over and above the aforementioned taxes, you need to add another R3,75 for transport and storage, as well as wholesale and retail margins. That margin is reduced to R3,23 in coastal areas due to the lower transportation costs.
The bottom line, however, is that the levies make up 36% of the petrol price inland and 37 percent of the cost in coastal cities.
Yet perhaps the most disturbing aspect is that the General Fuel Levy isn’t specifically earmarked for road construction or anything specifically motoring related – it goes directly to the National Treasury and can be used for any purpose deemed fit.
The AA has been fighting this and recently made a number of recommendations to the Parliamentary Portfolio Committee on Mineral Resources. These include, among other things, an investigation into the current fuel pricing model for all fuel types as well as a recalculation and audit of existing elements within the pricing model.
Also of concern is the annual increases to the two aforementioned levies, which amounted to 27 cents this year following the Finance Minister’s Budget Speech in February.
“The AA has always raised concerns that increases hurt the country’s poorest citizens, particularly as many of these citizens rely on public transport; an increase to the levies inevitably results in an increase to public transport rates.
“Increases to fuel prices also mean an increase to goods which are transported across the country as operators recover these higher input costs through increases which are passed on to consumers,” the association added.