Finance minister on how much the petrol price will have to increase to pay for e-tolls in South Africa
Finance minister Enoch Godongwana says the government cannot increase the cost of fuel levies to replace the failed e-toll scheme as it will place too much additional pressure on consumers.
In a post-budget briefing to parliament on Thursday (24 February), Godongwana said the National Treasury’s latest calculations show that an additional 74 cents would need to be added to the current fuel price to pay for the scheme.
He noted that 40% of South Africa’s fuel prices are already made up of administered prices, with the government looking at regulatory changes to address this.
Godongwana added that a petrol price hike to fund e-tolls was a ‘blunt instrument’ that would ultimately be carried by already cash-strapped consumers.
Instead, the finance minister said the government was weighing other options to address e-tolls debt. While a final decision is yet to be made, Godongwana said it was his ‘considered opinion’ that the user-pays principle would be retained in some form.
Paying for the e-toll system through a hike in the fuel levy was one of the alternatives proposed by e-toll critics before the system went live almost a decade ago.
Long-time opponents of the system, Outa, said that a 10 cents per litre increase in the fuel levy in 2007 – when e-tolling was first approved as part of the Gauteng Freeway Improvement Programme – would have seen all capital debt for the system paid off by 2015.
The government has for 10 years rejected fuel levy hikes as a way to pay off e-tolls as “unsustainable”. However, the national treasury has increased the tax by R1.70 since e-tolls come into effect in December 2013.
Over the same period, widespread rejection of the e-toll system by motorists, and the failure of the government to timeously address the issue, has led to South Africa accruing billions of rands in debt, necessitating bailouts for Sanral, and leading to the deterioration of the country’s entire road network due to lack of funding.
Godongwana confirmed that a decision on e-tolls would be communicated in ‘due course’.
Read: South Africa’s petrol price could hit R25/litre in coming months: economist
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