This is how South Africans could save up to R529 per tank of fuel

South Africans could be paying anywhere between R261 to R529 less per tank of fuel if taxes and levies were removed.

Taxes and levies on local fuels currently account for between R6.56 and R6.70 per litre sold in the country, depending on the grade and type – averaging an increase of around 8.5% from just six months ago.

This means between 27% to 28% of the cost per tank of petrol goes to the government, depending on which fuel you choose, with the majority of the pump prices attributed to the basic fuel price (55% and 60%).

In November 2023, these tariffs are currently made up of the following:

• Slate levy
• IP Trace levy (diesel)
• Pipeline levy (diesel)
• General fuel levy (GFL)
• Road Accident Fund Levy (RAF)
• Petroleum products levy (petrol)
• Customs and excise duties

There are two main taxes on fuel, which make up more than 99% of the total taxes. These are the General Fuel Levy (GFL) and the Road Accident Fund (RAF) Levy. The GFL is given to the National Treasury to use however it wants, while the RAF Levy can only be used to pay out claims for road accidents from the RAF.

The Slate Levy is delivered to the country’s Slate Account and pays for the cumulative over- and under-recoveries of fuel prices recorded during the month. For November, this levy was increased by 21.92c/l and is now 52.62c/l.

The IP levy pays for the “tracer dye” injected into illuminating paraffin to curtail the unlawful mixing of diesel and paraffin.

The table below details the values of all the various taxes accounted for in the fuel price in South Africa as of November 2023, according to data published by the DMRE.

Given the consistently rising fuel costs in recent years, motorists and industry participants have scrutinised levies, which significantly contribute to high pump prices.

Over the past two years, on average, petrol 95 has increased by 22.3% from R19.54/l to R23.90/l in November 2023, while diesel has risen by around 41.6% from R17.23/l to R24.40/l over the same period.

Compounding the rampant increases in fuel is the fact that the levies imposed on the fuel price have also increased annually – further burdening South African motorists while the government rakes in more revenue.

Since 2021, the GFL and RAF have increased by around 5% from 377c.00/l to 395.00c/l and 207.00c/l to 218.00c/l, respectively.

During the significant fuel price increases in 2021, Outa, a civil action group, called for a halt to the annual fuel levy increases.

“While we understand that we are a cash-strapped nation, we can no longer afford to burden society with higher taxes and levies applied to the price of fuel,” said Wayne Duvenage, Outa’s chief executive.

Duvenage also noted that the basket of levies and charges by the government has collectively increased by over 125% over the past decade – resulting in the collective cost of levies and surcharges of more than R10 per litre of petrol before the basic fuel price is added.

In November 2023, little has changed, and the cost of levies and surcharges are still over R10 per litre, as it currently sits at R10.95/l for 95 unleaded petrol.

Additionally, at R3.95, the GFL represents around 16.5% of every litre of petrol sold in South Africa. The RAF levy priced at R2.18 a litre represents around 9.1% of every litre of fuel sold.

According to the Automobile Association (AA), the two main levies will deliver around R138 billion in revenue to the government, with the national treasury estimating approximately R92 billion of this going to the GFL over the 2023/24 financial year, and the rest to the RAF.

The AA stated that in order to counteract the increasing fuel costs, the government needs to improve the management and governance of the RAF, as well as promote road safety to decrease the demand for RAF services.

The association also highlighted that funds are being misused and corruption is causing financial loss to the GFL, which could be better utilized if allocated and accounted for appropriately. Additionally, investments in alternative public transport and in enhancing Transnet are crucial.

How much you could be saving at the pumps

To see what motorists can save at the pumps if taxes and levies were absent, we calculated the average tank size of five popular vehicles in each major segment and what it would cost to refuel it with and without the tariffs.

The fuel type used for the comparison was petrol 95, which in November is priced at R23.90 per litre at inland rates. Without taxes, petrol 95 would cost R17.2/l.

The savings are detailed in the table below.

Read: The rising cost of owning a car in South Africa – and how much it has changed