There have been numerous concerns over how the government uses the fuel levy. These concerns were raised at the third Transport Forum Working Group event – Road Funding in South Africa Feedback from Operators, held in Midrand.
According to Electronic Toll Collection, currently, the fuel levy is the fourth highest income stream for government and provides over 5 per cent of national tax revenue. Fuel levies also make up 70 per cent of all road user-generated income for the state.
“The fuel tax in itself is not enough to fund South Africa’s roads at the moment. That’s the reality,” said event moderator and economist, Mike Schüssler.
Schüssler explained that if the country were to double its current spend on roads and public transport and finance through the fuel levy, the current fuel tax of R3.15 per litre of petrol would have to more than double to R7.50 per litre. This massively inflated figure would exclude a contribution to the Road Accident Fund.
Network asset management systems manager at the CSIR, Dr Paul Nordengen said, “The ring-fencing of roads is a decision made by national treasury. That decision was made several years ago. All money generated from fuel taxes goes into the pot. The advantage of toll fees is that that money is specifically used for roads.”
He explained that interventions to reduce the demand for road funding included periodic maintenance and rehabilitation of vehicles; the movement of freight from road to rail; improved public transport; reductions in crashes, incident rates and breakdowns; the reduction of heavy vehicle overloading and the encouragement of road-friendly heavy vehicles.
Road Freight Association CEO Gavin Kelly said as soon as the country progressed to fully electric vehicles, the fuel levy would disappear. “Somewhere down the line, the fuel levy is going to decrease dramatically,” he warned.
“The fuel levy is feeding many other things, not just roads. The road funding method we need has to be ring-fenced. If we are charging users of the roads, then the money taken from those users must go to roads, it cannot go to something else.”
Kelly explained that some provinces received an allocation to deal with their roads but didn’t spend it on roads. Some provinces even give their road allocation funds back to the treasury at the end of the year.
“The Department of Transport has tabled a Draft Bill to establish a Single Transport Economic Regulator.
“One of its functions is to try to ascertain how the money from the fuel levy is being spent, that it is spelt correctly and that the levies being charged by various state-owned entities are just, valid and supported. One of those entities is Sanral.”
Director at Boleng Bontle Consultants, Olga Mashilo said freight forwarders bemoaned the fact there is no comprehensive road funding policy.
“The funding of roads should be beneficial to freight,” she said.
“Freight damage to the road network is compensated by its significant economic contribution. The development of a freight management system should be considered to reduce the cost of inefficient road freight transport. Affiliation to regulatory bodies should also be minimised to ensure greater levels of compliance.”
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