https://solidariteit.co.za/what-is-the-slate-levy/
The slate levy on petrol and diesel is, from time to time, implemented for a month or two, after which it is lifted again. There is currently (October 2012) a slate levy of 13,16c a litre on petrol and diesel. What this levy is, how it works and where the money goes are unbeknown to most people. Because of the word ‘levy’ it is often assumed that it is just another way in which the state sucks our hard-earned money into the tax system.
The slate levy is one of seven levies imposed on fuel for vehicles, but is the only levy that doesn’t go to the state. The money collected through the slate levy goes to the fuel companies. The question then becomes: Why do the companies get this money during certain months when a slate levy is implemented and not during other months?
The answer to this question lies in the way in which fuel prices are determined in South Africa. Each month a “basic fuel price” is determined based on what the cost would have been to import refined fuel into South Africa. Each month’s basic fuel price is based on the prices that were in effect during the previous month. Therefore, each month South Africans pay the price that they actually should have paid in the previous month. In that way, the fuel companies are reimbursed when consumers are charged too low prices during one month, or the companies have to “reimburse” consumers if the prices were too high.
However, if the situation is balanced from one month to the next, then why is something like the slate levy still necessary?
Although the basic fuel price is “corrected” monthly, small imbalances can still build up as a result of the difference between the monthly averages on which the basic fuel price calculation is based and the actual dates on which the fuel companies perform transactions. If the daily basic fuel price for the first half of a month was R8 a litre and for the second half of the month R10 a litre, the average was R9 during the month. If, however, a company performed all its transactions during the first half of the month, its actual price for the month was, of course, R8 and not the average of R9.
When the fuel companies “owe” money to consumers due to this dynamic, the money is placed in a pool for safekeeping in order that the companies can be reimbursed when consumers “owe” them money again. However, sometimes the pool can be depleted. When that happens, a slate levy is implemented to restore the balance – to wipe the slate clean.