Tax ‘holiday’ limits April fuel price hikes

More fuel price hikes await motorists this week with diesel rising by up to R1.69 a litre and petrol by as much as 36c a litre.

However, the fuel shocks would have been much worse without the temporary R1.50/l fuel levy reduction on petrol and diesel announced last week by the ministers offinance and mineral resources and energy. The fuel levy in the price structure of petrol and diesel was reduced to 244 c/l and 230c/l respectively, while the Road Accident Fund levy remains at 218 c/l.

The more than 40% cut in the fuel levy, which applies until May 31, is part of a R6bn package to ease the burden on motorists.

Without this temporary fuel tax “holiday”, diesel was set to rise by over R3/l and petrol by about R2/l due to higher international prices for petrol, diesel and illuminating paraffin, even though the rand appreciated against the US dollar during the review period. 

The crude oil price has soared due to the war in Ukraine and though it has dropped to less than $110 a barrel from its near $126 peak earlier in March, it is still about 43% higher than a year ago.

Diesel prices have increased sharply due to a shortage of supply, as most diesel comes from Russia which has stopped exporting it due to sanctions imposed over the Ukraine conflict, says Robert Maake, senior manager at the Department of Energy.

There is also a 6.56 c/l increase in the slate levy.

From Wednesday April 6, prices will be adjusted as follows:

Petrol 93 ULP — up 28c/l

Petrol 93 ULP — up 36c/l

Diesel 0.05% sulphur — up 153c/l

Diesel 0.005% sulphur — up 169c/l

Illuminating paraffin — up 266c/l

In Gauteng, retail prices of 93 ULP and 95 ULP will be R21.63 and R21.96 respectively, while the wholesale prices of diesel will be R21.01 for 0.05% sulphur and R21.24 for 0.005% sulphur.

At the coast, 95 ULP petrol will rise to R21.24 while diesel will be R20.40 for 0.05% sulphur.

The fuel tax holiday was designed to give motorists a reprieve from rising fuel prices, which have hit record highs.

To provide relief to consumersfinance minister Enoch Godongwana announced in the February budget that there would be no increase in the general fuel levy or the RAF, the first time in 32 years that the government has not increased fuel taxes.

Last week Godongwana told the Sunday Times that petrol prices would be deregulated, and retailers would for the first time be able to compete on price and offer motorists discounts to fill up at their stations.