Jason Woosey|Published
There are no more nasty fuel tax surprises for South Africans on the horizon, Transport Minister Barbara Creecy has confirmed.
South African motorists are drowning under record fuel prices, which have put the spotlight on fuel taxes. Amid calls for renewed temporary relief measures, a report also surfaced last week that the Road Accident Fund wanted to increase its levy from R2.25 per litre to R3.
Since then, the Transport Minister has confirmed that there will be no such levy increases, at least during her tenure.
"As long as I'm in this job, we will not apply to National Treasury for an increase in the fuel levy. I think consumers are under enough pressure. What we have to do is sort out the mismanagement that has happened at the Road Accident Fund for a long time,” Creecy told eNCA.
Plan to fix the RAF
The Minister said three things needed to be done to address the RAF’s problems: fix its finances and management to curb wasteful spending, reform legislation to introduce a form of ‘no-fault’ compensation, and reduce road accidents and deaths to lower claims against the fund.
However, motorists could still face an additional RAF levy when renewing their vehicle licences. Last week, Deputy Transport Minister Mkhuleko Hlengwa said the government was considering a hybrid funding model for the organisation, Moneyweb reported.
Meanwhile, in what could be an important first step towards putting the RAF’s house in order, the government has appointed Waseem Carrim as its new CEO. Carrim brings a track record of financial accountability, having overseen nine consecutive clean audits during his tenure at the NYDA.
Fuel taxes in the spotlight
Fuel taxes remain in the spotlight as fuel prices reach record levels, with South Africans paying a General Fuel Levy of R4.10 per litre on petrol and R3.93 on diesel, in addition to the R2.25 RAF levy.
This comes after the government elected not to reintroduce the temporary fuel tax relief measures that were in place during the first fuel price spike earlier this year.
Numerous organisations, including the ANC, ATM and Fedusa, have called on the government to reduce the levies immediately. However, economists say there is a compelling reason why Treasury is reluctant to repeat the earlier relief – read more on that here.
However, there may be hope on the horizon, as President Cyril Ramaphosa revealed last week that the government was considering ways to provide relief from the fuel price crisis, while reiterating the need to be fiscally cautious, The Citizen reported.
“We are now giving consideration. It’s a budgetary issue. It does actually eat into our country’s reserves and our country’s fiscal position. We’ve got to consider the impact of anything that we can do,” Ramaphosa said.
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