Research from Budget Insurance shows how kicking a bad habit can reduce how much people spend on petrol and sin taxes.
The finance minister’s latest announcement has resulted in a 4.5% to 6.5% increase on excise duties, also known as ‘sin tax’, which targets high-volume daily consumables like tobacco, alcohol, and sugary beverages. These consumables like cigarettes and sugary drinks are often found on the shelves of petrol station convenience stores.
Budget Insurance spokesperson, Susan Steward, cited a recent study suggesting that if people were to respond positively to these increases and cut their sugary beverage consumption, for example, by 20%, the health benefits would be equivalent to a cheque between R1,500 and R4,500 a year.
“If you cut out smoking completely, you could save about R18,000 a year,” said Steward. She stressed that if you were to put the R18,000 into a savings account at a 4% annual return, you could receive returns up to R220,915 over 10 years.
“If you increase your contribution by 5% each year – money you likely would have paid on annual excise duties anyway – that amount grows to R273,439.”
Despite the finance minister announcing that there will be no increase in the general fuel levy on petrol and diesel for 2022/23 as well as no increase in the Road Accident Fund levy, Budget Insurance warned that this will only cushion the upcoming March petrol price and that an increase in levies is still looming.
Russia’s invasion of Ukraine has sent the oil price through $100 a barrel, while global currencies continue to show wild swings, which is likely to see local petrol prices skyrocket in March.
“The good news is that, with a few minor adjustments to your driving habits and with regular car maintenance, you can boost the fuel efficiency of your car by as much as 40%,” said Steward.
Budget Insurance calculated that if you have a 60-litre tank and fill it up with petrol, 48 times a year, at the current rate of R19,89 per litre, a 40% reduction in fuel consumption could save you close to R22,000 annually.
“If the price of fuel is increased by R1 in March 2022, a 40% reduction could save a person R24,000 a year,” said Steward.
Tips on how to have better fuel economy
Budget Insurance said that to save money on petrol you can:
- Service your car regularly; a vehicle can burn up to 30% more fuel if proper maintenance is not routinely performed.
- Check your car wheel alignment; bad alignment causes more friction which takes more power to overcome and results in higher fuel consumption.
- Check for underinflated tyres as they increase resistance.
- Reduce the vehicle’s weight by removing unnecessary items from it. If you only do city driving, consider driving with half a tank.
- Not speed.
- Maintain momentum by not stopping and starting; this can be done by having reasonable following distances.
- Drive at the lowest speed in the highest gear without labouring the engine.
- Make use of economy settings if your car has the technology.
- Do several tasks on one round trip as it limits mileage and lets your vehicle run at its optimal temperature
- Wait out traffic, battling through traffic increases fuel consumption and wears down vehicles transmission and brakes.
“Saving on fuel by keeping your vehicle in shape and changing the way you drive may seem like a bit of a hassle, but if you increase your fuel economy by 40%, a tank that normally gets you 700 km could get you close to 1000 km. This translates to almost a tankful of savings for every two times you fill up,” said Steward.