DA calls on government to scrap 33% tax levy on petrol

As the country braces for another massive fuel hike with the increases expected to be at least R3.50 per litre, the Democratic Alliance (DA) claims it is “working on every available avenue to stop fuel price hikes, and slash the taxes on fuel”.

The DA is encouraging South African to co-sign a letter to stop the government from implementing the upcoming fuel price hikes.

The DA’s letter has been directed to Ministers of Finance Enoch Godongwana and Minister of Energy Gwede Mantashe.

DA Shadow Minister of Mineral Resources and Energy Kevin Mileham has implored Godongwana to scrap the 33% tax levy on fuel in order to keep the price within reason.

“The exorbitant 33% tax on fuel rests squarely in the hands of the ANC government. South Africans simply cannot afford the fuel price increase. Our economy is still in tatters and there seems little hope and indication that government is trying to right the ship.”

ALSO READ: AA asks what plans government has to stop more record fuel price spikes

While the petrol price includes a number of taxes, the Department of Minerals Resources and Energy says that the increases or decreases in the petrol price is also determined by the price of crude oil and the rand’s performance against the US Dollar and other factors including Russia’s war in Ukraine.

According to Statistics South Africa, one-third of the petrol price goes to levies and taxes

“There are up to 13 different charges, depending on the type of fuel and where you happen to live. According to the Department of Mineral Resources and Energy this price consists of these four broad elements:

• basic fuel price (48%);
• taxes and levies R6.67 (33%);
• retail and wholesale margins (14%);
• storage and distribution costs: (6%).

The two biggest levies are the general fuel levy and the Road Accident Fund (RAF) levy.

The general fuel levy is a tax on each litre of fuel while the RAF levy is a source of revenue for the RAF that is responsible for compensating victims of motor vehicle accidents.

Mileham has called on government to introduce cost saving measures to bring the cost of fuel down, including introducing legislation to deregulate and reduce the fuel price, reform or replace the Road Accident Fund’s levy with a workable system that does not add to the fuel price.

He also called for an urgent debate in Parliament to end what he called “the ANC government’s fuel taxes [as much] as possible, and to implement the DA’s caring proposals.”

Meanwhile, President Cyril Ramaphosa has acknowledged that the pending rising cost of petrol will impact the pockets of South Africans hard, with the temporary reduction of the general fuel levy set to end this month.

ALSO READ: SA motorists warned of massive petrol price hike in June