Good news for motorists as fuel levies stay stagnant, price model to be reviewed

As motorists dig ever deeper into their pockets to pay for petrol in South Africa, Finance Minister Enoch Godongwana has confirmed that the fuel price model will be reviewed.

Delivering his budget speech on Wednesday, Godongwana indicated that engagements with Mineral Resources and Energy Minister Gwede Mantashe around the fuel price model has already started.

“Minister Mantashe and I have agreed that a review of all aspects of the fuel price is needed. Our teams have already begun to engage on this critical work,” he said.

Godongwana also announced no increases to fuel levies.

“In 2021, the inland petrol price breached R20 per litre. The higher prices have put pressure on the cost of transport, food and other goods and services.

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“To provide some relief to households, no increases will be made to the general fuel levy on petrol and diesel for 2022/23. This will provide tax relief of R3.5 billion to South Africans. There will also be no increase in the Road Accident Fund [RAF]  levy,” he said.

The general fuel levy currently sits at R3.93 per litre. In 2021, it was R3.77.

The RAF levy currently stands at R2.18, up from R2.07 in the previous year. Combined, this adds R6.11 to every litre of petrol and diesel sold in the country. 

The Automobile Association (AA) has since welcomed Godongwana’s announcement.

“This is a landmark win for all consumers – not only motorists – and while fuel prices may still increase the additional burden of higher taxes is now out of the way. We are naturally extremely happy that our calls have been heeded,” the AA said in statement.

The AA argued that if levies were increased, it would damage the country’s economy, and “would lead to increases to goods and services across the board, especially as fuel prices are slated to once again reach record levels in March”.

The organisation previously called for the fuel price model to be revisited and adjusted amid the raising petrol price over the past months.

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Massive fuel price hikes for March 2022 have been predicted based on data from the Central Energy Fund (CEF), which could skyrocket petrol above R21 per litre for the first time.

According to the CEF data, the petrol price for 95 unleaded petrol (ULP) will increase by R1.25 per litre, and 93 ULP will go up by R1.24 per litre.

This will see petrol price for 93 ULP and 95 ULP cost R21.13 and R21.39 per litre respectively.

These increases will outstrip the record high of R20.42 per litre in December last year.

Diesel prices will go up by R1.29 per litre, while a significant increase of R1.22 per litre for illuminating paraffin has also been predicted.