Johannesburg - Although the 2019 fuel levy increases, announced by Finance Minister Tito Mboweni during Wednesday’s Budget Speech, were lower than the previous year, the new ‘carbon tax’ element is ruffling more than a few feathers.
Fuel levies are being increased by 29 cents in the case of petrol and 30 cents for diesel, but of this 9 cents (petrol) and 10 cents (diesel) form part of a new carbon tax that will come into effect on June 5.
However, this new tax comes across as “cynical abuse” of public sentiment under the guise of tackling climate change, says Heinrich Volmink, executive head of The Organisation Undoing Tax Abuse (OUTA).
“Introducing a carbon fuel levy without a clear indication that this will be ring-fenced for climate change mitigation initiatives, and with no clear link to behavioural change, appears to be disingenuous,” Volmink said.
Instead this carbon tax on petrol appears to be just another revenue stream for government’s coffers, Outa added in a statement released after the Budget Speech.
Although motorists have enjoyed some substantial fuel price decreases in recent months, we are currently seeing a reversal of that trend, with a petrol price hike of more than 60 cents a litre projected for March due to strong international oil prices and a weak rand, and the aforementioned fuel taxes will add to that in April, meaning motorists could be paying almost a rand more for petrol by the upcoming public holiday season.
Change of heart on e-tolling?
There were some encouraging developments however, with Mboweni indicating that negotiations to resolve the e-tolling matter were on the cards, which is a refreshing change from last year’s ‘e-tolls are here to stay’ stance.
“We look forward to engaging with the various authorities to find a solution to the e-toll system which has failed since its inception,” said OUTA CEO Wayne Duvenage.
“While he does say that the user-pay principle should be borne in mind when finding a solution, OUTA points out that e-tolling is a failed user-pay scheme and that the fuel levy is a very efficient user-pay alternative. We believe this softened stance may be a result of this being an election year and that sanity is starting to prevail on the failure of e-tolls.”