Petrol price ‘relief’ for South Africa

 ·21 Feb 2024

Finance Minister Enoch Godongwana says the National Treasury will not increase the General fuel levy and Road Accident Fund (RAF) levy for 2024.

In his budget speech delivered on Wednesday (21 February), Godongwana said that the government is mindful of the already high cost of living and the impact fuel prices have on food and transport costs.

“In this regard, we are proposing no increases to the general fuel levy for 2024/25. This will
result in tax relief of around R4 billion. This is money back in the pockets of consumers,” the minister said.

This means that the General Fuel Levy will remain at 18% of the retail price, and the Road Accident Fund (RAF) levy will remain at about 10%. 

For a litre of inland 95 petrol, the general fuel levy is currently at R3.95, while the RAF levy is at R2.18.

Combined, they add R6.13 to the price of price of petrol, which currently stands at R23.24 for a litre of inland 95.

However, the carbon fuel levy, which is included as an add-on to the general fuel levy, will increase from increase from 10c/l to 11c/l for petrol and from 11c/l to 14c/l for diesel.

“A discussion paper outlining proposals for the second phase of the carbon tax will be published for public comment later in the year,” the minister said.

Experts were divided

Leading up to the budget, tax experts in South Africa were divided on the fuel levy increases in South Africa.

Deloitte’s Billy Joubert said that it was unlikely that there would be an increase, as the cost of living crisis facing South Africa would deter the National Treasury from increasing taxes on already cash-strapped consumers, with the government hoping to keep money directly in the pockets of consumers.

However, given that the government maintained the fuel levy at a consistent level for two years amid sky-high fuel prices, experts at Sage and the SAIPA Centre of Tax Excellence said that an increase was likely.

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