Fuel levy relief ‘hasn’t entirely taken the pain away’, says AA on petrol price hike

The Automobile Association (AA) says the recent fuel levy relief will not necessarily relief the pain for motorists’ pockets.

Petrol prices will go up at midnight with 93 UPL petrol increasing by 28c per litre and 95 UPL by 36c, while the price of diesel will rise by between R1.52 and R1.69 per litre.

95 ULP will cost R21.96 per in inland and R21.24 for the coastal areas.

This is despite Finance Enoch Godongwana’s announcement last Thursday of a temporary reduction of the general fuel levy (GFL), which will decrease by R1.50 per litre from Wednesday until 31 May.

Godongwana said the decrease will reduce the levy for petrol from R3.85 per litre to R2.35 per litre.

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The levy on diesel will be reduced from R3.70 per litre to R2.20 per litre.

According to Mineral Resources and Energy Minister Gwede Mantashe, the increases in both petrol and diesel would have been close to R2.00 per litre and over R3.00 per litre respectively if there was no intervention from government.

While the AA welcomed the levy reduction, it indicated that the levy holiday will not take “away the pain” for motorists

“These are record fuel prices across the board and while government’s intervention has cushioned the blow somewhat, it hasn’t entirely taken the pain away,” the association said in a statement.

“The intervention to cut the GFL is significant as it shows government is taking the issue of rising fuel costs seriously, which is to be welcomed,” the AA added.

The association also government’s proposals to deal with rising fuel costs into the future.

“Whatever plans government is considering, though, these should be fast-tracked as the trend of increasing fuel prices is likely to continue in the short- to mid-term, especially as the situation in the Ukraine remains unresolved, which is adding pressure to the international petroleum product price, and, in turn, to local prices,” the AA concluded.

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Government is planning to take further steps to ease the burden on motorists by deregulating the price of petrol.

The deregulation will only occur once Treasury figures out how to recover the R90 billion loss from the fiscus it would be if fuel taxes are removed in one go.

Godongwana told Sunday Times that there are many options on the table to achieve this such as additional taxes on motor licence renewal fees to fund the Road Accident Fund (RAF).

There has been talks of RAF levy being scrapped from the fuel levy and locating it elsewhere, which has been backed by Parliament’s Portfolio Committee on Mineral Resources and Energy.

ALSO READ: Parliament backs move to scrap RAF from the fuel levy