Good news for petrol prices in South Africa

Finance minister Enoch Godongwana says National Treasury will not increase the General fuel levy and Road Accident Fund levy for 2023.

In his budget speech delivered on Wednesday (22 February), Godongwana said that are no major tax proposals in this budget as tax revenue collection for 2022/2023 is expected to reach R1.69 trillion – exceeding the 2022 budget by an estimated R93.7 billion.

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

The General Fuel Levy is currently pegged at R3.94 per litre, and the RAF levy is at R2.18 per litre of 95 petrol (inland pricing). Combined, they add R6.12 to every litre of petrol and diesel sold in the country.

The minister also announced diesel-related price relief for food manufacturers.

“To ease the impact of the electricity crisis on food prices, the refund on the Road Accident Fund levy for diesel used in the manufacturing process, such as for generators, will be extended to manufacturers of foodstuffs. This takes effect from 1 April 2023 for two years,” he said.

South African motorists have battled heightened fuel prices for the last year.

The government tried to bring some relief to motorists in 2022 by cutting the fuel levy by R1.50 per litre after Russia’s invasion of Ukraine, which saw fuel prices spike. However, that relief was only in place for a couple of months, being reduced by 75 cents per litre by the end of the year.

The February fuel price rose due to an increase in Brent crude oil prices, higher international prices for petroleum products and the strengthening of the South African currency (the rand) against the US dollar.

Last week, BusinessTech looked at the expected petrol price for March 2023 and noted a major increase in petrol prices. Despite the good news in regard to fuel levies not increasing, South Africans who are inland can expect to pay R22.23 per litre of 95 petrol – an increase of 120 cents a litre.

Although the news may be welcomed by some South Africans, Cosatu previously said that the government should cut fuel levies.

Cosatu said that higher fuel prices hurt all South Africans, but mainly the poor, who are expected to be plunged further into debt as wages fail to keep up with the cost of living.

“Whilst there is little that government can be done about the international oil price volatility, it can, as it did in 2022, provide relief to commuters and the economy by lowering our fuel taxes.”

“This will have the additional benefit of reducing inflation and the insatiable temptation by the Reserve Bank to raise the repo rate and thus further impoverishing workers and suffocating the economy,” Cosatu said.

Read: How much you will be taxed in South Africa in 2023 – based on what you earn