Cape Town - The high price of oil and the weaker rand have contributed to the higher cost of fuel, Finance Minister Pravin Gordhan said on Thursday.
“Oil is extraordinarily high,” he said at a televised New Age breakfast briefing.
“And for various reasons the rand has been settling at R8.50 to R9 for the past few years.”
He said the weaker the rand, the more expensive the imports into South Africa became.
Gordhan announced on Wednesday during his 2013 Budget that there would be a hike in fuel costs on April 3.
This includes an increase in the general fuel levy of 15 cents a litre and eight cents a litre for the Road Accident Fund.
The general fuel levy was expected to contribute about R3.2 billion in revenue for the 2013/14 fiscus.
Gordhan explained that a third of the fuel levy went to the RAF.
“The RAF is a huge burden. It has a deficit of R30 to R40 billion.”
A review was set to take place to restructure that fund.
Gordhan said for Gauteng residents, there was a small relief.
“Gautengers for the past few years were paying for building a new pipeline and that part of levy has now been removed.” - Sapa