Tito Mboweni hits SA commuters with a 27c-a-litre hike in the fuel levy
Finance minister Tito Mboweni has again turned to motorists to squeeze out more funds for the fiscus.
In his 2021 budget speech on Wednesday, Mboweni announced that from April 2021 fuel levies will increase by 27c/litre, comprising 15c/litre for the general fuel levy, 11c/litre for the Road Accident Fund levy and 1c/litre for the carbon fuel levy.
There are two major taxes included in the fuel price — the general fuel and the Road Accident Fund levies — which together comprise around 40% of the price of every litre of petrol and diesel sold in the country. The general fuel levy (GFL) is now R3.77 per litre of petrol and R3.63 per litre of diesel, while the Road Accident Fund levy (RAF) stands at R2.07 per litre for both fuel types. Together they add up to R5.84 on every litre of petrol (just more than 37% of the total cost), and R5.70 on every litre of diesel (42% of total cost calculated against recommended resale price).
The AA said it was disappointed in the fuel levy increase, saying it could really hit motorists’ pockets, especially if the fuel price continues rising as has been the trend in the past four months. Earlier this month the AA said bullish international oil prices are setting the stage for yet another hefty hike in fuel prices.
The association says the current picture shows month-end increases of up to 56c/litre for petrol and 47c for diesel. The AA said if oil continues on its trajectory, SA's fuel prices might edge back into record territory in the medium term.
Earlier in the week the AA had called on the minister to not increase fuel levies, pointing out that neighbouring countries that buy fuel directly from SA do not add these taxes to their fuel pricing, making their fuels cheaper than they are in the country which supplies them.
Increases to fuel levies go hand-in-hand with increases in public transport fares, including taxis, said the AA.
“Increases in fuel levies also contribute to increased input costs of manufacturers, suppliers and the agricultural sector which are absorbed through increases passed on to consumers, many of whom cannot afford even the slightest changes to their monthly budgets,” it added.
The association said that any tax increases must be viewed against the backdrop of government spending, and that citizens are mindful of ongoing and systemic corruption, bailouts, increases to utility charges, and a bloated civil service.
The AA noted that all of this is coming at a time when hundreds of thousands of people have either lost their jobs, or had their salaries or wages reduced. The AA said that while jobs are scarce, people who are seeking employment — or who are low-income earners — are reliant on safe, affordable and reliable transport to find and maintain those jobs. Any additional financial pressure on these citizens will invariably have a direct affect on employment and, by extension, the greater economy.
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