- The Automobile Association of South Africa wants the government to review fuel taxes urgently.
- General Fuel Levy and Road Accident Fund Levy of key concern regarding high gas prices.
- AA asks consumers to sign a petition that it will present to the government to review the fuel price.
- For motoring news, go to Wheels24
2021 saw fuel prices reach record high levels in South Africa of more than R20 per litre, and they are again touching those levels despite a decrease in fuel prices in January. The General Fuel Levy is currently pegged at R3.93 per litre (up from R3.77 in 2021), and the Road Accident Fund (RAF) levy at R2.18 per litres (up from R2.07 in 2021).
Combined, just these two levies add R6.11 to every litre of petrol and diesel sold in the country. The Automobile Association of South Arica (AASA) says any adjustments announced by the Minister of Finance in the Budget Speech must consider financially-constrained motorists.
The time to act is now
"Government must act quickly to deal more effectively with the fuel price to mitigate against rising costs that negatively impact all consumers in the country. This can only be achieved through a review of the current fuel pricing model," the AA notes.
"Our economy is closely linked to the fuel price; it is a major input cost in the manufacturing, retailing and agricultural sectors. We have noted before that a review of the current structure of the fuel price and an audit of all the elements that comprise the fuel price should be done sooner rather than later. We, therefore, call on the Minister of Finance to initiate such a review during his Budget Speech on 23 February," says the AA.
In addition, the Association again urges the Minister not to increase the fuel levies, which are part of the fuel price: "We know all too well of the economic challenges facing the country and of the importance of the revenue raised through the two main levies. We are also aware that, as was the case last year, delivering a Budget in the current economic environment is tricky and difficult and that the pressure to ease the government's financial burden is immense. However, increasing the levels of the General Fuel and Road Accident levies will be counter-productive as this will impact mostly on the poorest of the poor."
Fuel is cheaper next door
Neighbouring countries that buy fuel directly from South Africa do not add these taxes to their fuel pricing, making their fuels cheaper than in the country that supplies them.
"Our country faces enormous and complex economic challenges. High fuel prices are adding to these challenges, and instead of accepting the current model, we must seek solutions that benefit consumers, not place them in more financial distress. One immediate solution for us, for instance, is to review the funding of the poorly managed Road Accident Fund (RAF). Our reliance on the RAF is a direct result of South Africa's poor road safety, and that's where more attention needs to be given for a long-term solution," urges the AA.
Signatures from the AA's petition calling on the Minister to #ReviewTheFuel in his Budget Speech next Wednesday will be submitted along with a letter from Association expressing its views on the levies and calling on him to initiate the fuel review. You can add your voice to the petition by visiting the AA website.
"We must accept that drastic intervention is needed if we are to grow our economy; one way we believe this can be done is by dealing more effectively with the fuel price than what we currently are," the AA concludes.
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