EDITORIAL: Slow burn of fuel price rise
The problem is it’s effectively an extremely regressive tax because the effect is mostly felt by commuters
The petrol price rose an extraordinary 71c on Wednesday, which makes the current price the highest it has been in South African history. You will now pay around R14.49 per litre for 93 octane petrol, which means it will cost just below R800 to fill an average tank. The petrol price in SA moves on a mechanical basis in line with the oil price and rand/dollar exchange rate, but government levies on petrol have been used as a quick and convenient fillip for budget shortfalls. Most recently, then finance minister Nhlanhla Nene plugged a hole in the budget in 2015 with an 80.5c increase in the petrol levy which would cost motorists around R17bn a year. The increase took the levy to 40% of the price, but with price escalations since then, the proportion is now about 39%. Either way, the levy is now at European levels and the petrol price is among the highest in the world. In the US, for example, motorists currently pay about R7.30 per litre. Nene chose to increase the levy because at that...
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