Picture: Henk Kruger/African News Agency (ANA)
Picture: Henk Kruger/African News Agency (ANA)

Freight companies dealt a hard blow by rise in fuel levies, toll fees

By Lorna Charles, Karen Singh Time of article published Feb 25, 2021

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DURBAN - KwaZulu-Natal trucking companies said the fuel levy increase announced by Finance Minister Tito Mboweni yesterday, coupled with a rise in toll fees, would severely impact on their businesses.

Mboweni said fuel levies would increase by 27 cents a litre, comprising 15c a litre for the general fuel levy, 11c a litre for the Road Accident Fund levy and 1c a litre for the carbon fuel levy.

The South African National Roads Agency announced this week that toll fees would rise by 3.39% from March 1.

Chris Moodley of KZN Customs Clearing and Forwarding said while they understood the reasons behind the increases, it would negatively affect businesses.

“We can’t put our prices up as customers will not be able to absorb this hike, so we’ll have to just take it on despite not recovering from the pandemic. This is not sustainable, a real blow to the industry, and has a devastating knock-on effect on our operations. We as reputable transport companies can't compromise on safety and insurance like cheaper transporters.”

Jitesh Persadh, owner of Sealord Trading, concurred that transporters, especially long-distance truck companies, would be hard hit by the increases in both toll fees and fuel levies.

“The current toll fees on a truck, specifically a horse and trailer from Durban to Johannesburg return, are currently around R1 600. With our insurance, laying out and maintenance costs we are going to really be drained,” Persadh added.

Gavin Kelly, the chief executive of the Road Freight Association, said the increase in fuel taxes would also dampen available disposable funds and could see even less revenue generated through the fuel levy and road taxes.

“Freight operators are going to need to be inventive, cost-centre aware, and will have to develop innovative multi-customer and multi-load offerings to stay competitive. It’s a very tight budgetary outlook for the road freight and logistics sector in the next few years with margins being cut even further,” Kelley added.

Automobile Association spokesperson Layton Beard said the association was disappointed that the fuel levies were increased. He said the increases, which would come into effect in April, would add more pain for people, depending on what the fuel price does in March.

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