File picture: Timothy Bernard / Independent Media.
File picture: Timothy Bernard / Independent Media.

Budget Speech 2020: Fuel levy hike means more pain at the pumps from April

By Motoring Staff Time of article published Feb 26, 2020

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Cape Town - Although fuel prices are set to decrease slightly in March, April will see the cost of filling up rise once again thanks to increased fuel levies that will come into effect at the beginning of that month.

At the 2020 Budget Speech held in Parliament on Wednesday, Finance Minister Tito Mboweni said that fuel levies would increase by 25 cents a litre, of which 16 cents would go to the general fuel levy and 9 cents to the Road Accident Fund.

This, the Minister said, is to adjust for inflation, but it’s worth pointing out that fuel in South Africa already carries a hefty tax burden. 

According to the Automobile Association, fuel taxes currently account for nearly 40 percent of every litre sold in South Africa. In fact for every litre of petrol that you put into your car, R5.59 goes to taxation, of which R3.61 forms part of the general fuel levy and R1.98 is claimed by the RAF.

In 2019 Mboweni hiked fuel taxes by 29 cents a litre, with 15 cents forming part of the general fuel levy, 5 cents going to the Road Accident Fund (RAF) and a further nine cents forming part of a new carbon tax, although this was not allocated to funding climate change in any way.

Earlier this week the AA said that any increase to the fuel levies this year would be ill-advised and counter-productive.

“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,” the association added.

“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.” 

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