Motorists across the country exhaled sighs of dismay as the Minister of Finance, Tito Mboweni, announced an increase in fuel levies during his 2020 Budget Speech. During his speech, the Minister announced that the general fuel levy will increase by 25 cents per litre.
Sixteen cents of this will be for the general fuel levy and 9 cents of which is for the Road Accident Fund levy.
“To adjust for inflation, the fuel levy goes up by 25 cents per litre, of which 16 cents is for the general fuel levy and 9 cents is for the Road Accident Fund levy,” Mboweni said.
The levies will come into effect from April 1, as will the subsequent increase in the price of fuel.
The Automobile Association (AA) had previously implored Mboweni not to increase fuel levies, as it is of the opinion that it would be damaging to the economy.
“Seen against the background of government spending, a bloated civil service, looming increases to electricity rates, bailouts of state-owned entities to the tune of billions of rands, and minimal or no increases to salaries and wages over the same period, any increase to the fuel levies now is ill-advised and counter-productive,” the organisation said.
“Given the fact that many South Africans are buckling under severe financial constraints, such an increase this year will be more than detrimental; it could be catastrophic.”
According to the AA, two of the most major motoring taxes already comprise 40% of the fuel price in South Africa before the increase was announced today.
“While a slight increase, even one in line with inflation, may not seem drastic, it has an enormous impact on the lives of consumers who rely on every cent to make it to the end of each month,” it added.