It is naive to think government can heed the DA’s call for a 20% reduction in fuel levies, as that would leave the country in a state of financial depression, analysts said.
DA leader Mmusi Maimane yesterday called for government and the National Treasury to reduce the fuel levy rate by R1 per litre, as the consecutive fuel hikes in the past three months have left South Africans financially battered.
Maimane, joined by the Organisation Undoing Tax Abuse (Outa), announced they would be marching to Treasury from Church Square in Pretoria next Tuesday, to demand that the petrol price be reduced to R15 per litre.
But his calls were mere “opportunistic politicking” since his demands were “unrealistic” and would lead the country into “the doldrums, like Venezuela”, economics Professor Bonke Dumisa told The Citizen.
“If ever people are going to say the fiscus must subsidise petrol, where will that money come from? Already a country that produces its own oil, Venezuela, is in the doldrums. Maimane is really politicking: people make certain pronouncements in public but in reality, they are not practical,” he said yesterday.
The country has been hit by numerous fuel price hikes this year, with a litre of 95 octane unleaded petrol costing more than R16 per litre in Gauteng. This equates to approximately R100 more each time a tank is refuelled than three months ago.
A large portion of the fuel price is made up of levies, which go to the Road Accident Fund and the national fiscus, Dumisa said.
“One of the challenges we face as a country is that we have a big fiscal budget deficit. We are living beyond our means. The announcement (of free education) by former president Jacob Zuma did not make things better for us.
“If someone says the price of petrol can go down, without explaining where that money can come from, then that person is either naïve about how the petrol price is determined, or that person is an opportunist. The money for service stations can’t be tampered with.”
But revenue can be generated once President Cyril Ramaphosa reduces his Cabinet to at least 15 departments, Maimane said.
“This can save us billions of rands a year. SA has one of the most bloated governments in the world.”
Maimane’s call includes less levies pumped into the Road Accident Fund, but this could anger the public, Dumisa said. “The government will be accused of not doing enough for accident victims.”