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Fuel levy fury: Possible price shock for Western Cape motorists

Apr 01 2018 19:00

A proposed fuel levy for motorists in the Western Cape, in addition to the existing national fuel levy, is being fiercely opposed.

The comes as the provincial government said it is in urgent need of funding to maintain and build roads.

A feasibility study on the fuel tax is already under way, said finance MEC Ivan Meyer. He explained that the study will take into account the economic situation in the country at the moment and whether consumers would be able to afford it.

READ: Fuel levy and VAT hikes a war on SA’s poor

Meyer added that the process would take about five to six years before being implemented in the province.

However, the proposal is already being opposed.

The Cape Chamber of Commerce and Industry explained that the idea of a provincial fuel levy is not new.

"The idea was proposed and approved by the Treasury 13 years ago when the ANC ran the provincial government, but it was never implemented", said Chamber president Janine Myburgh.

At the time the ANC proposed a levy of between 10c and 50c.

Myburgh said that in the present circumstances a provincial fuel levy would be unfair and hard on the poor.

"Cars have changed a lot in the last 13 years. Modern diesel and turbo-charged petrol vehicles have become a great deal more fuel efficient, but the poor mainly drive older cars which are not fuel efficient. That means they will be paying more than the people who can afford new cars."

Myburgh said with the prediction that it would be four or five years before the levy, if approved, could be introduced, further changes to cars would have taken place.

"In five years we can expect to see more electric cars on the road and in 10 years there will be a lot of electric cars. A fuel levy will look pretty silly then."

One way to avoiding the levy altogether would be to run cars on Liquid Petroleum Gas.

The Chamber said that in Europe cars were available that could change from petrol to gas at the flick of a switch. It said since gas was cleaner than petrol and diesel, its use should be encouraged.

The Chamber also noted that gas-fuelled vehicles are common in Mozambique and the idea would come to South Africa very quickly if the government and the provinces continued to increase fuel levies.

"I understand that roads are expensive to build and maintain but a fuel levy is not the answer any more," said Myburgh. "The Province must think again and think ahead. Things are changing."

She also warned of unintended consequences.

"When the ANC was in power in the province they drastically increased car and truck licence fees and the result was that people started registering their vehicles in the Eastern Cape where licence fees were a lot lower. It probably cost the Western Cape more than they gained from the higher licence fees."

The Organisation Undoing Tax Abuse (OUTA) slammed the implementation of provincial fuel levies.

"Taxes and levies already make up an above-average portion of the existing fuel price. Any special tax introduced, approved and implemented gives government a foot in the door and increases on these are then just a matter of time," said OUTA transport portfolio manager Rudie Heyneke.

The national fuel levies were increased by a total of 52c a litre earlier this year, an increase that will be implemented on 4 April 2018.  

The total general fuel levy and RAF levy currently stand at R5.30 per litre of 93 octane petrol. To fill up a 60 litre tank, motorists will pay R318.00 in fuel levies.

Cosatu in the Western Cape has also hit out at the plan.

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cape town  |  fuel levy  |  petrol
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