Opinion: Time for Government to Cut Fuel Taxes and Tariffs!

January 3, 2022

On November 3 this year the price of a litre of petrol increased by R1,21, and the price of a litre of diesel increased by R1,48. The price of illuminating paraffin increased by R1,45 a litre. After the increase, a litre of petrol now costs R19,50. All the combined levies involved in the petrol price are now at R10,10 for each litre of petrol – this is 126% higher than 10 years ago. Over the same period, the basic fuel price increased by less than 50%. Levies – amongst which are included the Road Accident Fund (RAF) and Petrol Levy – now constitute 52% of the fuel price, up from 42% a decade ago.

While other factors play a role in the petrol price – such as the increased global demand for crude oil and a weaker rand – a big contributor is the amount of taxes and levies applied by government. In light of continued pressures on the economy and South African businesses, citizens and trade prospects, it would be prudent for the government to eliminate the taxes and levies that it collects as part of the petrol, diesel and paraffin prices. It is unrealistic to expect government to cut all spending and welfare overnight, but it must afford consumers some measure of relief as soon as possible. With South Africa's already high general tax burden, there is no good reason to further punish taxpayers when they fill their vehicles in order to be productive members of society.