As motorists dig deeper into their pockets to pay for petrol in South Africa, Finance Minister Enoch Godongwana has confirmed that the fuel pricing model will be overhauled.
delivering his budget speech on Wednesday, Godongwana indicated that agreements with Minister of Mineral Resources and Energy Gwede Mantashe on the fuel price model have already started.
“Minister Mantashe and I agree that a review of all aspects of the fuel price is needed. Our teams have already started this crucial work,” he said.
Godongwana also announced no increases in fuel taxes.
“In 2021, the petrol price for inland shipping exceeded R20 per litre. Higher prices have put pressure on the costs of transportation, food and other goods and services.
“In order to provide some relief to households, the general fuel tax on petrol and diesel will not be increased for 2022/23. This will give South Africans a tax credit of R3.5 billion. The Road Accident Fund will not be increased either [RAF] charge,” he said.
The general fuel tax is currently R3.93 per litre. In 2021 that was € 3.77.
The RAF charge is currently at R2.18, up from R2.07 the previous year. Combined, this adds R6.11 to every gallon of gasoline and diesel sold in the country.
the automobile associationAA) has since welcomed Godongwana’s announcement.
“This is a milestone for all consumers – not just motorists – and while fuel prices may still rise, the added burden of higher taxes is now out of the way. We are, of course, delighted that our calls have been heeded,” the AA said in a statement.
The AA argued that raising tariffs would hurt the country’s economy and “lead to increases in goods and services across the board, especially as fuel prices will hit record levels again in March”.
The organization previously called for the fuel pricing model to be reconsidered and adjusted amid rising gasoline prices in recent months.
Huge fuel price increases for March 2022 have been predicted, based on data from the Central Energy Fund (CEF), that gasoline could rise above R21 per liter for the first time.
According to the CEF data, the petrol price for 95 unleaded petrol (ULP) will increase at R1.25 per liter, and 93 ULP at R1.24 per litre.
As a result, the petrol prices for 93 ULP and 95 ULP will cost R21.13 and R21.39 per liter respectively.
These increases will surpass the record high of R20.42 per liter in December last year.
Diesel prices will increase by R1.29 per liter, while a significant increase of R1.22 per liter is also forecast for illuminating paraffin.