Finance Minister Enoch Godongwana has made a pivotal decision regarding the country’s fuel levies for the coming year. In his 2024 Budget Speech, Godongwana declared that there will be no adjustments to the General Fuel Levy for the fiscal year 2024/25. This move comes as a relief to many South Africans who are already shouldering a hefty fuel tax load. Currently, the General Fuel Levy stands at R3.95 per litre, and this is further compounded by the Road Accident Fund levy, which imposes an additional R2.18 per litre on consumers.
Despite the hold on fuel levies, an update was shared regarding the carbon fuel levy, which is set for an increment. Starting from April 3, the levy for petrol will see a rise to 11 cents per litre, and diesel will climb to 14 cents per litre, marking an increase from the current rates of 10 cents for petrol and 11 cents for diesel.
The Challenge of Global Oil Prices
A pressing issue for South African motorists is the global oil market, which is anticipated to lead to substantial increases in petrol and diesel prices in the upcoming month. According to the latest figures from the Central Energy Fund, a possible hike of approximately R1.20 per litre for both petrol and diesel could be on the horizon as of March 2024. However, there’s a glimmer of hope that a strengthening rand may mitigate these increases slightly by the month’s end, though it’s improbable that the hikes will dip below the R1 threshold.
Given the potential adjustments, the cost of 95 ULP petrol at the coast could escalate to R23.72 per litre, while in Gauteng, the price is expected to reach R24.44 per litre. Additionally, 93 ULP is projected to increase to about R24.08 per litre in Gauteng.
Financial Implications
Here’s a simplified table to provide a clearer view of the current and upcoming fuel tax components:
| Tax Component | Current Rate (per litre) | New Rate (from April 3, 2024) |
|---|---|---|
| General Fuel Levy | R3.95 | No change |
| Road Accident Fund Levy | R2.18 | No change |
| Carbon Fuel Levy (Petrol) | 10 cents | 11 cents |
| Carbon Fuel Levy (Diesel) | 11 cents | 14 cents |
This strategic decision by the Finance Minister to maintain the General Fuel Levy rates aims to ease the financial burden on South African motorists amidst fluctuating global oil prices and the country’s economic challenges. While the introduction of an increased carbon fuel levy signifies a move towards environmental consciousness, the overall approach balances fiscal responsibility with the immediate economic pressures faced by citizens.
