Last week the price of petrol increased by more than 121c per litre. The basic price of petrol is now 81% more expensive than it was ten years ago.
Fuel is an inflationary pressure. If the cost to transport goods increases, the price to purchase those same goods also increases. This leaves South Africans having to bear the brunt of the increasing fuel prices in many areas of their lives and not just at the petrol pump.
The price of fuel is determined by a number of different internal and external factors. An example of an external factor is the price of Brent crude oil or the rand to dollar exchange rate. The South African government can't control this. However, different levies, which the government can control, are internal factors that influence the petrol price.
The Organisation Undoing Tax Abuse (OUTA) has raised questions around whether levies are really necessary. They determined that the basic price of petrol is around R9,37c per litre while the levies amount to R10.10c per litre.
OUTA CEO Wayne Duvenage says that a weak rand and high oil prices are not helping but the increases in levies over the past decade are driving the price of petrol higher and higher. Levies have increased by 126% over the past ten years from around R4.50c to R10.10c.
He said, “these incessant increases in these levies over the last decade has led to the problem that we have now and we cannot ignore that and the government needs to pull back on these increases on the levies because we're over taxed”.
Approximately R2.18c of every litre of fuel that is purchased goes to the road accident fund. Duvenage believes that corruption at the fund is causing a lot of problems which South Africans are paying for.
“This is what happens when this government tends to just throw money at the problem instead of addressing the maladministration and the corruption in the road accident fund and that's a big problem for society. If they carry on like this we got a serious problem” concluded Dvenage.