A steep increase in the fuel levy is one of the measures finance minister Pravin Gordhan is most likely to\u00a0use to help meet the current budget shortfall according to\u00a0economists at Econometrix.<\/p>\n
Speaking in\u00a0the 21 February edition of The Star, Azar Jammine, chief economist at Econometrix, said that an increase was likely as a large amount of the required budget could theoretically be raised from the fuel levy without hiking the fuel price too much.<\/p>\n
According to Jammine, the current forecast is that R64 billion will be raised through the fuel levy this year, and increasing the levy by only 10% would raise an additional R6.5 billion in revenue for government.<\/p>\n
In addition, at least R13 billion would be raised if the fuel levy was increased by 20%.<\/p>\n
\u201cThis will go a long way to raise the R28\u00a0billion extra tax revenue the government needs as mentioned in the medium-term budget policy statement.”<\/p>\n
\u201cIt is also environmentally friendly, because it will get people to use less fuel and get people to use more fuel efficient cars, whether by switching to newer more fuel efficient cars or to small cars,\u201d he concluded.<\/p>\n
Gordhan will deliver his budget speech on Wednesday, 22 February 2017.<\/p>\n
| Increase (%)<\/th>\n | Additional cost (cents)<\/th>\n<\/tr>\n |
|---|---|
| 5%<\/td>\n | \u00a014c<\/td>\n<\/tr>\n |
| 7.5%<\/td>\n | \u00a020c<\/td>\n<\/tr>\n |
| 10%<\/td>\n | \u00a028c<\/td>\n<\/tr>\n |
| 15%<\/td>\n | \u00a041c<\/td>\n<\/tr>\n |
| 20%<\/td>\n | 55c<\/td>\n<\/tr>\n<\/tbody>\n<\/table><\/div>\n \n<\/div>\n The current price for 95 Petrol inland is R13.62, while 0.05% Diesel (wholesale) is R11.63.<\/p>\n \n |