Plea for Mboweni to not increase fuel levies

The Automobile Association (AA) is urging Finance Minister, Tito Mboweni to not increase fuel levies when he delivers the Budget Speech on Wednesday (24 February).

The AA says any adjustments to the fuel levies will add another layer of financial demand onto consumers who are already under heavy strain.

‘A percentage increase – even one in line with inflation – may not seem onerous, but combined with increases to other goods and services it will add up.

‘In light of the financial devastation on businesses and individuals caused by Covid-19 we believe levy increases will be counter-productive and harmful,’ said AA Spokesperson, Layton Beard.

There are two major taxes included in the fuel price – the General Fuel and Road Accident Fund levies – which together comprise between 37 and 42 percent on every litre of petrol and diesel sold in the country.

The General Fuel Levy (GFL) is currently pegged at R3.77 per litre of petrol and R3.63 per litre of diesel, while the Road Accident Fund (RAF) levy currently stands at R2.07 per litre for all fuel types.

Together they add up to R5.84 on every litre of petrol (just more than 37 percent of the total cost), and R5.70 on every litre of diesel (42 percent of total cost calculated against recommended resale price).

‘Neighbouring countries who buy fuel directly from South Africa do not add these taxes to their fuel pricing, making their fuels cheaper than it is in the country which supplies them.

‘It is worth repeating that any increases to the fuel levies go hand-in-hand with increases to public transport fares – including taxis.

‘Increases to the 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,’ said Beard.