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Tax increases to hit motorists: Here's how much more you'll pay for fuel

2018-02-21 20:04

Image: iStock

Cape Town - The 52 cents a litre increase in the General Fuel and Road Accident Fund levies announced by Finance Minister Malusi Gigaba in today’s Budget Speech is cause for great concern, says the Automobile Association (AA). 
 
The increases amount to a total increase of 11% on the current levies from R4.78 to R5.30. The increases comes into effect on 1 April, along with other increases, such as the increase of VAT from 14% to 15%.
 
The Minister announced the General Fuel Levy will increase by 22 cents from R3.15 to R3.37 (7% increase), and the RAF Levy will increase by 30 cents from R1.63 to R1.93 (18% increase).

Budget commentary 

In January, the AA says it urged government to be careful in determining future hikes to the levies, and to consider the impact the increases have on especially the poorest of the poor in the country.
 
The AA said: "At the time we also argued that any increases should be in line with inflation which, we note today, is at its lowest since March 2015 at 4.4%. Instead the increases are sizable, and more than double current inflation."
 
The Association says the increases will place an extra burden on all road users, but especially on the poorest of the poor who mostly rely on public transport. 


What do you think of the tax increases? How will fuel price increases affect you? Email us

Fuel price increases

Based on current fuel prices inland and coastal, these increases will now comprise 38% and 39% respectively of a litre of 93 unleaded petrol, reports the AA. Currently a litre of unleaded 93 octane fuel inland costs R13.90 - this will increase to R14.42. A litre of unleaded 93 octane at the coast costs R13.49 which will increase to R14.01. The AA said: "These increases are based on February fuel prices which may increase or decrease before the implementation of the levy price increases in April."

The 52 cents a litre hike in the fuel levies more than wipes out the 30 cents gain realised in the fuel price in January, and the AA’s predicted decrease of 28 cents going into March; these decreases were gained mainly through the strengthening of the Rand as a result of the change in leadership of the ruling party.
 
The AA said: "Coupled with the increase in VAT, the increase to the fuel levies means South Africans, especially the poor, will, in our opinion, be faced with substantial hikes in their day-to-day living expenses. Many of these people will simply not be able to absorb them."

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