End of the road for inland fuel transport levy

2014-03-27 13:06

An inland fuel transport levy that costs motorists an extra three cents a litre will be abolished from next month, the energy department has said.

“The minister has approved the termination of the IITRS levy of three cents a litre applicable in the price structures of petrol and diesel with effect from April 2,” director of fuel pricing mechanisms, Robert Maake, said in Pretoria today.

“This levy will not be part of the BFP [basic fuel price], so it will be a three-cent reduction from the pump line.”

This was a preview to Energy Minister Ben Martins’ announcement of the basic fuel price tomorrow, he said.

The levy was implemented in 2009 when the pipeline between Johannesburg and Durban had reached full capacity in the previous year.

Deputy director of fuel pricing mechanisms, Mashudu Sinthumule, said the levy was a compensation for oil companies who used alternative routes.

“For companies on the coast who wanted to bring products inland via the road ... We paid them three cents. That amount was added to the fuel price structure. We said we would do that until we found an alternative plan.”

Sinthumule said the new multiproduct pipeline was completed in 2012, but due to a backlog of payment to oil companies, the levy could not yet be terminated.

“We no longer pay those who use roads because there is an alternative now.”

Maake would not provide a hint on whether the BFP would increase.

“What I can say is that consumers must be aware that fuel levies, the road accident fund and transport costs will also be adjusted.”

He said the department was waiting for the markets to close today and for auditors to go through the numbers before the announcement will be made tomorrow afternoon.

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