The AA has released a statement asking Finance Minister Tito Mboweni not to increase fuel levies, arguing that this would be damaging for the country.
It noted that Mboweni faced an enormous challenge ahead of his 2020 Budget Speech, but said that targeting fuel levies would not be the best way to deal with the situation.
“Seen against the background of government spending, a bloated civil service, looming increases to electricity rates, bailouts of state-owned entities to the tune of billions of rands, and minimal or no increases to salaries and wages over the same period, any increase to the fuel levies now is ill-advised and counter-productive,” said the AA.
Fuel levies are already high
“Previous years have seen higher than inflation-linked increases to the fuel levies – the General Fuel Levy, the Road Accident Fund levy, customs and excise taxes and the Carbon Tax,” the AA added.
“However, 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.”
It highlighted that the two major motoring taxes – the General Fuel Levy and the Road Accident Fund – already comprise around 40% of the price of every litre of fuel sold in South Africa. This adds up to R5.59 per litre of petrol or R5.47 per litre of diesel.
Transport industry concerns
The AA also highlighted that another increase to fuel levies could result in issues for the transport industry.
“We have seen in the past that any increases to the fuel levies are met with a swift increase to public transport fares – including those of taxis,” said the AA.
“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.”