![\"\"](\"https:\/\/businesstech.co.za\/news\/wp-content\/uploads\/2018\/09\/Fuel-tax-changes.png\")
<\/a><\/p>\nThe graph below shows how the proportion of taxes in the total fuel price has changed over the past 15 years.<\/p>\n
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National Treasury has identified the Road Accident Fund as a potentially huge liability on South Africa’s finances, and says large increases to the fuel levy will be needed over the next three years to avert short-term disaster.<\/p>\n
The medium term budget policy statement delivered by finance minister Tito Mboweni on Wednesday (24 October), highlighted a big problem with the RAF.<\/p>\n
“The Fund represents a potentially large liability,” it said. “Despite a 30c increase to the RAF levy in the 2018 budget, the fund\u2019s liability is expected to grow to R393 billion by 2021\/22 from R206 billion at present.”<\/p>\n
To combat this, the RAF will require “further large increases to the fuel levy in each of the next three years” to manage the short-term liability.<\/p>\n
South African motorists are currently experiencing record high fuel prices, and have called on government to intervene to alleviate the burden on households and businesses.<\/p>\n
However, government has stated that there is little it can do, as the the fuel price is largely beholden to things beyond its control – specifically international petroleum prices, as well as currency exchange rates.<\/p>\n
One aspect that can be controlled by government, however, are the taxes that are applied. Currently, taxes make up almost 40% of the total petrol price (R5.34) with the RAF component making up R1.93 of that.<\/p>\n
Over the last decade, the tax component of the petrol price has increased over 200%, with the RAF levy growing 315%.<\/p>\n
The graph below details how the taxes and levies have changed over the past 15 years.<\/p>\n
The graph below shows how the proportion of taxes in the total fuel price has changed over the past 15 years.<\/p>\n<\/a><\/p>\n<\/a><\/p>\n