By Reon Janse van Rensburg
From 7 April 2021, motorists will be hit with an enormous petrol price hike of R1,00 per litre while the wholesale price of diesel will increase by up to 65c per litre.
BusinessDay reports that the Central Energy Fund (CEF), which adjusts fuel prices monthly, announced that the retail price of 95 octane petrol will increase by R1 per litre inland and 99c per litre at the coast, while 93 octane will increase by 95c per litre inland and 94c per litre at the coast.
The wholesale price of high-sulphur diesel will increase by 65c per litre inland and 64c per litre at the coast, while low-sulphur diesel will rise by 63c per litre inland and 62c at the coast.
The inland April fuel price of R17,32 for 95 octane unleaded petrol will be a new record high, surpassing the previous 2018 record of R17,08 per litre.
These increases include increases of 16c per litre and 11c per litre respectively in the fuel levy and the Road Accident Fund (RAF) levy on both petrol and diesel that Finance Minister Tito Mboweni announced in his Budget Speech on 25 February this year.
Therefore, from 7 April 2021, the fuel levy in the price structure of petrol and diesel will amount to R3,93 per litre of petrol and R3,79 per litre of diesel, respectively, and the Road Accident Fund levy will amount to R2,07 per litre for both petrol and diesel.
According to OUTA (Organisation Undoing Tax Abuse) various levies are included in the fuel price, for example non-fuel related costs such as the Fuel Levy, the Road Accident Fund Levy, wholesale and retail profit margins as well as smaller amounts for transport and storage costs.
In 2009, the combined value of these levies amounted to R3,61 or 49% of the total fuel price for a litre of fuel. In 2020 this amount increased to R9,48, and in April last year it already made up 68% of the fuel price.
According to Morné Malan, head of news and publicity at Solidarity, this significant burden is becoming too much for the taxpayer. He argues that the general fuel levy, which is ostensibly used to maintain roads, and the levy for the Road Accident Fund, an institution that is already on the brink of collapse, make fuel much more expensive than it should be.
The bad news for South African motorists is that it is highly unlikely that the government will eliminate these levies. It rather seems that the government is unilaterally shifting its responsibility for road maintenance and the Road Accident Fund to South Africans while the government is spending taxpayers’ money on the ever-growing state bureaucracy. This bottomless pit is never going to be filled with anything but empty promises.
For South Africa, the solution is not in a new government or in the appointment of new staff members working for the government, but rather in less interference from the state and in a free market economy that allows for competition in the market. Not only will that make the price of products such as fuel more affordable, but it will also ensure the best service delivery because consumers’ hard-earned money will do the talking. The latter is especially necessary in South Africa to improve service delivery and ensure no monopolisation.
Fuel price increases with astronomical amount
According to the Automobile Association (AA), South Africans are vulnerable due to the weak rand and rising oil prices. The AA warned that future economic and policy shocks are likely to have a significant effect on the fuel price, especially now that the international oil price has recovered.
SA’s fuel price needs less government intervention, not more – https://www.businesslive.co.za/bd/opinion/2018-10-24-sas-fuel-price-needs-less-government-intervention-not-more/
Here is the official petrol price for February – https://businesstech.co.za/news/energy/464714/here-is-the-official-petrol-price-for-february-2/
Taxes and levies make up almost 70% of South Africa’s fuel price – https://businesstech.co.za/news/energy/388415/taxes-and-levies-make-up-almost-70-of-south-africas-fuel-price/
Petrol price to hit record high – https://www.businesslive.co.za/bd/national/2021-04-01-petrol-price-to-hit-record-high/