Good news for petrol prices in South Africa
During his budget speech for 2022, finance minister Enoch Godongwana revealed that the General Fuel Levy (GFL) would not be increased in the 2022/23 financial year. Additionally, no further Road Accident Fund (RAF) levy increase will be implemented in the coming year.
Godongwana said the decision should provide some relief to households, given that the petrol price has hovered around the R20 mark in recent months. He explained the decision to avoid increases would provide tax relief of R3.5 billion to South Africans.
South Africa’s fuel prices have been on an upward trajectory of late. Inland, the cost per litre breached R20 late last year and a minimum fuel increase of R1.20 per litre is expected to take effect from March.
Eastern Cape Fuels recently estimated that 93 and 95 unleaded petrol will increase by R1.23 and R1.24 per litre, respectively, while 50ppm diesel will increase by R1.37 per litre.
Following calls from the Automobile Association, Godongwana said he had been in discussions with the minister of energy and mineral resources, Gwede Mantashe, to conduct a review of the country’s fuel prices.
“We have set up teams. The intention is to review the fuel price and its structure going forward,” he said. The intention is to make sure that we can have a petrol price which is competitive with this economy.”
The minister added that the relevant teams would make announcements regarding the fuel price in due course.
South Africa’s fuel prices are subject to volatility caused by the international cost of crude oil, but it is not solely to blame for the country’s high fuel costs.
According to the Organisation Undoing Tax Abuse (Outa), combined levies on motorists — which rose 126% in ten years — are a major contributor to the exorbitant prices South Africans pay for fuel.
While the decision to hold off on RAF and GFL increases should provide some relief for motorists, South Africa’s carbon tax rate was increased from R134 to R144 on 1 January 2022. As a result, the carbon fuel levy will increase by 1c to 9c per litre for petrol and 10c per litre for diesel from 6 April 2022.
Source: mybroadband
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