Fuel levy 'will soar to R10 a litre' if it's the only funding option for roads

An e-toll gantry on the N17 near Germiston. An economist says it will cost motorists a staggering R10 a litre if fuel tax is the only funding mechanism for SA's roads. He said other means of taxes, such as e-tolls, should be part of the funding mix.
An e-toll gantry on the N17 near Germiston. An economist says it will cost motorists a staggering R10 a litre if fuel tax is the only funding mechanism for SA's roads. He said other means of taxes, such as e-tolls, should be part of the funding mix.
Image: SIMON MATHEBULA

If the fuel levy was the only funding mechanism for the maintenance of the country’s roads and the expansion of the road network, this would cost motorists dearly.

Economist Mike Schüssler estimated that it would cost motorists a staggering R10 a litre in fuel tax if it was the only funding mechanism. 

The general fuel levy is currently R3.37 (petrol) and R3.22 (diesel) a litre. 

The argument presented by some that a fuel levy was the panacea for all road-funding needs was a misnomer, Schüssler said. 

During a recent presentation at the Transport Forum, Schüssler said R137.5bn was needed annually to fund road maintenance and a further R27.5bn to expand the country's road network to meet the needs of the economy. 

He based the figure of R137.5bn on the assumption that the average road in the country needed to be replaced every 20 years.  

"In addition, to grow the road network just 1% a year would require about R27.5bn."  

He said these estimates implied that the R165bn was not shared with other imperatives such as housing, as was currently the case with fuel taxes.

He said motorists might have to fund another R19bn-R21bn a year for the public transport component.  

"This increases the total costs that road users would have to finance to approximately R186bn," Schüssler said. 

Based on these figures, Schüssler modelled that, with fuel tax the only road funding method, around R7.80 per litre would be needed in fuel tax to maintain current roads and support a 1% increase in the road network annually.  

He said if all public transport was subsidised and if all taxis were exempt from the fuel tax, non-exempt road users would have to cough up R10 a litre in fuel tax. 

"The fuel tax alone would, therefore, be a very expensive funding option - particularly for heavy trucks whose operators would likely pass the costs on to consumers," said Schüssler. 

Schüssler said the country had to collect money directly from road users in other forms such as tolls, congestion, time-of-day, distance and other charges to settle the shortfall.  

"Road funding in SA has to come from a mixture of collection methods and we have to implement these soon," Schüssler said.


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