Johannesburg - Either Dipuo Peters cannot do maths or she is lying about the costs of a fuel levy to pay off the Gauteng Freeway Improvement Project (GFIP) debt.
Our calculations show that to pay off the SA National Roads Agency’s R20 billion-plus debt over 10 years would require a national fuel levy increase of just 15 cents a litre.
This is way below what she claimed would be needed.
This week, she told the Gauteng inquiry into e-tolls that if a fuel levy mechanism was used to pay for the roads, the fuel levy would have to increase by R3.65 a litre nationally.
The Star took a closer look at her claim.
The fuel levy is about R2.18 a litre. This is the average of the cost of the levy on petrol (R2.24 a litre) and that on diesel (R2.09 a litre).
The figures were obtained from the website of oil giant Shell, which has a table showing the components of the pump cost of fuel.
To get to the minister’s figure of R3.65 a litre, there would have to be an increase, therefore, of R1.47 a litre.
The levy hike as proposed by Peters is 67 percent (in round figures).
The next thing to do is look at the revenue generated by the current levy.
The government’s budget revenue for 2013/14 is R985.7bn (according to economist Kevin Lings, who analysed the annual budget last year for Stanlib).
Of that amount, the fuel levy accounts for 5.2 percent or about R51.2bn.
An increase in the levy of the size contemplated by Peters – 67 percent – would mean total revenue from the levy would be R85.5bn, an increase of R34.3bn. That is about 10 times the amount needed a year to service the GFIP debt. That debt, stated by Sanral and government officials, is about R20bn, and R3bn a year would be sufficient to pay that off (and its interest accrued) within 10 years.
If the amount raised by the minister’s increase of R1.47 a litre is actually 10 times what is required, then it is logical that, in reality, the increase in the fuel levy needs to be only a 10th of what she said.
In other words R0.147. Or in layman’s terms, 14.7 cents a litre.