Mbalula shuts down speculation about possible fuel levy increase to fund e-tolls

Transport Minister Fikile Mbalula has shut down the speculation that Minister of Finance Enoch Godongwana might increase the fuel levy to raise additional revenue to fund the e-tolls.

This after the Organisation Undoing Tax Abuse (Outa) on Tuesday said in a statement that although it welcomed the fuel price reduction, it feared Godongwana may seize the opportunity to increase the fuel levy by 25c to 30c per litre to fund the e-tolls.

“Recently, Minister of Transport Fikile Mbalula indicated that an announcement on the e-toll decision is expected to coincide with the Minister of Finance’s medium-term budget policy statement, due in October,” said Wayne Duvenage, Outa CEO.

“Furthermore, there have been strong hints that the Minister of Finance will increase the fuel levy, to off-set the scrapping of e-tolls. Should this happen, Outa will denounce this decision on the basis that the fuel levy has already been increased in excess of R2.50/l since the Gauteng freeway upgrade began in 2008. Government failed to take up Outa’s suggestion of a ring-fenced 10c/l increase to the fuel levy some eleven years ago which would have settled the freeway bonds by today.”

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According to Duvenage, by increasing the fuel levy by 25c/l, an additional R5.5 billion will flow into Treasury’s coffers each year.

“We’ve seen this movie before, when government makes desperate financing decisions based on short-term external factors, only to see the negative ramifications play out in the long term.”

However, Mbalula said in a statement on Wednesday that the government had not made any pronouncements on the matter.

“We therefore appeal to all stakeholders to desist from rumour mongering that is intended to create anxiety among motorists,” said Mbalula.

“I have engaged with the AA and Outa to discuss matters of mutual interest and I remain committed to constructive dialogue that assists in resolving challenges. There is no reason to be alarmist on possible pronouncements on the government’s decision on the funding of the Gauteng Freeway Improvement project. I urge everyone to await the formal pronouncements and not engage in speculation that offers no solution to our challenges.”

Compiled by Vhahangwele Nemakonde