Fuel levy hike ‘erodes’ petrol price decrease

What would have been a welcome relief for motorists at the petrol pumps this month has been dampened by a hike in the General Fuel Levy, which took effect this week.

While the Department of Mineral and Petroleum Resources has effected a 5 cents per litre decrease in the petrol price and 37 cents per litre for diesel for June, consumers are still expected to feel the pinch of the ‘simultaneous tax hikes’.

This is according to the South African Petroleum Retailers Association (SAPRA).

“Consumers and businesses were hoping for a more meaningful reprieve, especially after a third consecutive month of fuel price cuts.

“Unfortunately, the new increases in fuel levies – 16 cents per litre for petrol and 15 cents for diesel – are eroding much of that anticipated relief,” said SAPRA national vice-chairperson Lebo Ramolahloane.

He said the increase in the General Fuel Levy, now R4.15 per litre for petrol and R4.02 for diesel, alongside the Road Accident Fund Levy, still at R2.18 per litre, ‘contributes heavily to the overall fuel price structure’.

“Fuel is a key cost driver in virtually every industry. Any increase in fuel-related taxes pushes up the cost of transport, goods and services.

“So, while the price adjustments in June are technically decreases, the net gain to consumers is marginal.

“It’s important to understand that fuel taxes are fixed. They don’t decrease when the oil price drops or the rand strengthens.

“While Brent crude prices and exchange rates play a role, the increasing tax burden continues to raise the floor on what we pay at the pumps,” he said.

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