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How the new fuel levy will hurt you at the pumps

The 52 cents a litre increase in the General Fuel and Road Accident Fund levies announced by finance minister Malusi Gigaba in Wednesday’s Budget Speech is cause for great concern, notes the Automobile Association (AA).

The increases amount to a total increase of 11% on the current levies from R4.78 to R5.30. The increases come into effect on 1 April, along with other increases, such as the increase of VAT from 14% to 15%.

The minister announced the General Fuel Levy will increase by 22 cents from R3.15 to R3.37 (7% increase), and the RAF Levy will increase by 30 cents from R1.63 to R1.93 (18% increase).

The AA argued in January that any increases should be in line with inflation which it noted is at its lowest since March 2015 at 4.4%. “Instead the increases are sizeable, and more than double current inflation,” the AA said.

The association said the increases will place an extra burden on all road users, but especially on the poorest of the poor who mostly rely on public transport.

Based on current fuel prices inland and coastal, these increases will now comprise 38% and 39% respectively of a litre of 93 unleaded petrol.

Currently, a litre of unleaded 93 octane fuel inland costs R13.90. This will increase to R14.42. A litre of unleaded 93 octane at the coast costs R13.49 which will increase to R14.01.

“Note these increases are based on February fuel prices which may increase or decrease before the implementation of the levy price increases in April,” the AA said.

This 52 cents a litre hike in the fuel levies more than wipes out the 30 cents gain realised in the fuel price in January, and the AA’s predicted decrease of 28 cents going into March; these decreases were gained mainly through the strengthening of the rand as a result of the change in leadership of the ruling party.

This is what you can expect to pay:

Fuel February official With tax hike
93 octane fuel inland R13.90 R14.42
93 octane fuel coastal
R13.49 R14.01

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