File picture: Thobile Mathonsi/African News Agency (ANA)
THE AA has called on the government to address the rising fuel costs by announcing a review of the fuel-price model as a matter of urgency.
Finance Minister Enoch Godongwana is due to deliver his Budget speech next week.
Automobile Association (AA) spokesperson Layton Beard said the government must act quickly to deal more effectively with the fuel price.
Beard said that one way to do that was by reviewing the fuel-pricing model.
“Our economy is closely linked to the fuel price; it is a major input cost in the manufacturing, retail and agricultural sectors. We have noted before that a review of the current structure of the fuel price, as well as an audit of all the elements which comprise the fuel price, should be done sooner rather than later. We therefore call on the minister of Finance to initiate such a review during his Budget speech.”
Beard said the AA urged Godongwana not to increase the fuel levies that were part of the fuel price.
“We know all too well of the economic challenges facing the country, and of the importance of the revenue raised through the two main levies. We are also aware that, as was the case last year, delivering a budget in the current economic environment is tricky and difficult and that the pressure to ease the government's financial burden is immense.
“However, increasing the General Fuel and Road Accident Fund (RAF) levies will be counter-productive as this will impact mostly the poorest of the poor.”
Beard said the General Fuel Levy was pegged at R3.93 a litre (up from R3.77 in 2021) and the RAF levy at R2.18 a litre (up from R2.07 in 2021). Combined, they added R6.11 to every litre of petrol and diesel sold in the country.
“Neighbouring countries who buy fuel directly from South Africa do not add the taxes to their fuel pricing, making their fuels cheaper than it is in the country which supplies them.”
Beard said 2021 saw fuel prices reach record levels and they were again touching those levels despite a decrease in fuel prices last month.
“Our country faces enormous and complex economic challenges. High fuel prices are adding to these challenges and instead of accepting the current model, we must seek solutions that benefit consumers, not place them in more financial distress.
“One immediate solution for us, for instance, is to review the funding of the poorly managed Road Accident Fund (RAF). Our reliance on the RAF is a direct result of South Africa’s poor road safety and that’s where more attention needs to be given for a long-term solution.”
Beard said the AA’s petition calling on the minister to #ReviewTheFuel in his Budget speech next Wednesday, would be submitted along with a letter from the association expressing its views on the levies and calling on him to initiate the fuel review.
The petition can be found here.