The Fuel Levy
April will bring a petrol price hike of 30 cents via the ‘Fuel Levy’ – yet another blow to financially troubled consumers. The Fuel Levy will increase from R2.55 to R2.85 per litre, according to the Automobile Association (AA). The Fuel Levy is a tax collected for each litre of fuel that is sold.
The National Treasury, who administers the tax collected, stressed that the Fuel Levy is a general tax. Despite many people mistaking it for a road-related expense.
The petrol price is adjusted every month in South Africa in accordance with international petrol prices and the Rand to US Dollar exchange rate, though many other aspects factor in.
The Basic Fuel Price (BFP) calculation is based on costs related to shipping petrol to our country from Singapore, the Arab Gulf and the Mediterranean, the AA clarified.
Storage, insurance and harbour facilities for off-loading petrol into storage facilities are among the costs involved. This month, costs amounted to R4.70 a litre for 93 unleaded petrol inland.
Transport costs to other regions from the harbour, such as excise duties and customs, retail margins that go to petrol station owners, and additional storage costs also affect the petrol price. Notably, the Fuel Levy is included in these other costs. As well as the Road Accident Fund (RAF) Levy.
What the AA Says
This month, these other costs clocked up to R6.76 a litre for 93 unleaded petrol inland. Of which R2.55 comprised the Fuel Levy and R1.54 the RAF Levy, according to the AA.
The National Treasury gets the Fuel Levy directly, while the Road Accident Fund gets the RAF Levy, which it uses to provide care to car crash victims.
Thus, R4.09 (35%) of every R11.46 litre of petrol is allocated to various government levies. Come April, this amount will go up to R4.39 a litre says the AA.
“Using this formula, filling a 50 l tank with 93 unleaded petrol inland, will cost you R573. Of this, R127.50 goes directly to the Fuel Levy with a further R77 going to the RAF Levy, giving a combined total of R204.50,” the organisation said.
“If the price of petrol remains unchanged at the end of April, and only the increase in the Fuel Levy is recorded, the cost of filling a 50 l tank will increase to R588. Of this, the Fuel Levy will comprise R142.50, and RAF Levy will remain unchanged at R77, for a combined total of R219.50 generated from the two levies,” said the AA.