Petrol Levy Decrease Could Save Motorists Money

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The first two months of 2022 have been extremely painful for motorists as the price of petrol surged to record highs. 


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The first two months of 2022 have been extremely painful for motorists as the price of petrol surged to record highs. 

At the beginning of the year, petrol was cheaper by around R2 per litre. Due to a uncertain political climate related to the war and Ukraine, the price of petrol looks set to increase again on the first Wednesday in April. 

Finance Minister Enoch Godongwana has tabled a proposal that will see the fuel levy contribution made by motorists being reduced by R1.50 cents per litre. This deduction would be factored into the price of petrol at fuel stations. 

This however does not mean prices of petrol will decrease but rather result in motorists paying R1.50 cent per litre less than they would have paid. 

Godongwana said, “The intention of the temporary reduction of the general fuel levy is to support a phasing in the fuel price increases that we are expecting in the short term. This will go some way in assisting South Africans to adjust to the new reality”.

The proposal would see the reduction in the levy for petrol from R3.85 cents per litre to R2.35 cents per litre, while the levy on diesel will be reduced from R3.70 cents per litre to R2.20 cents per litre.

The minister says the amount excludes other fuel levies such as the Road Accident Fund and the Carbon Fuel Levy. 

The Organisation Undoing Tax Abuse (OUTA) says the decision is a welcomed relief for motorists. 

Wayne Duvenage, OUTA CEO said,  “Naturally, we would have liked to have seen a greater temporary reduction of the fuel levy, closer to R3.00 per litre, but that may have been a bridge too far on the affordability front for the state”.

He added that the recent high price of petrol may have helped the government realise that it needed to halt annual levy increases and review the various components that make up the price of petrol in the country.

“By doing so, when and if international events placing pressure on the oil price subside and oil returns to around the $60 per barrel mark, and if our economic policies are able to get the rand to strengthen somewhat to around R14.00 to the US dollar mark, we will see the price of petrol drop to around R16 per litre again” concluded Duvenage.

 

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