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Transport minister Fikile Mbalula says the cabinet abandoned the plan after Russia invaded Ukraine, which led to record fuel prices. Picture: Sunday Times
Transport minister Fikile Mbalula says the cabinet abandoned the plan after Russia invaded Ukraine, which led to record fuel prices. Picture: Sunday Times

Transport minister Fikile Mbalula says the government scrapped plans to add the cost of e-tolls to the fuel levy after things became “messy”. 

Addressing the media on Thursday, Mbalula said the cabinet abandoned the plan after Russia invaded Ukraine, which led to record fuel prices.

He said a final decision on the future of e-tolls would be announced in October when finance minister Enoch Godongwana delivers the medium-term budget policy statement (MTBPS). 

“There was a decision taken by cabinet on e-tolls, which was taking us in the direction of the fuel levy. The fuel levy story has become very messy over time and it is no longer an option we can consider, among others. Fuel prices have gone up and the conflict between Russia and Ukraine has exacerbated our situation,” said Mbalula. 

“We are not taking that route. We are looking at options in terms of e-tolls which we will finalise before the MTBPS.”

Mbalula said he had made “a lot of promises and concessions” regarding e-tolls when he was “almost certain” a decision would be delivered.

“That was last year, when Tito Mboweni was minister of finance, and now it’s Godongwana. So this one is certain, we agreed last week. Our teams are working on the issues before we make a final decision.”

Fuel levy relief 

The Organisation Undoing Tax Abuse (Outa) this week called for the R1.50 fuel levy relief to be extended for July. 

The fuel levy reprieve of R1.50 per litre has been in place for April, May and June. 

“Should Godongwana reduce this to a reprieve of 75c per litre from July 6 to August 2, as planned, we can expect a petrol price increase of around R2.50 in July, pushing the price of 95 octane inland from R24.17 per litre to around R26.70,” said Outa.

“While we understand the negative impact of around R2.8bn in tax revenue lost to the fiscus for every month the R1.50 per litre fuel levy reprieve remains in place, we believe while petrol prices remain above R22 per litre, the minister would be wise to retain the full R1.50 reduction.”

The organisation said Godongwana should not reduce the fuel levy reprieve to 75c in July, but wait until geopolitical factors, combined with an improvement in the rand exchange rate, can bring about a significant reduction in the price of petrol.

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