The Automobile Association of South Africa (AA) has called on the government to urgently remove the fuel levy to mitigate the impact of recent fuel price hikes on citizens. The AA expressed concern over the significant increase in fuel prices, with 95 Unleaded petrol rising by R3.33 and 93 Unleaded petrol by R3.12 per liter. Diesel prices have also surged, with 500ppm increasing by R2.84 and 50ppm by R3.24 per liter.
According to the Central Energy Fund (CEF), fuel prices are expected to increase further, with predictions that a liter of petrol could rise by R4.58 in November. The AA criticized the Road Accident Fund (RAF) for requesting a hike in the RAF levy, currently R2.25 per liter, which would exacerbate the financial burden on citizens. Instead, the AA proposed abolishing the RAF levy and exploring alternative revenue streams for the government.
The AA's criticism of the government's approach to fuel pricing was echoed by its spokesperson, Bobby Ramagwede. He recalled that earlier in the year, the Minister of Finance had temporarily reduced the fuel levy by R3 per liter in April, resulting in a loss of approximately R17 billion in revenue. The AA had warned at the time that this measure was short-sighted and would not provide long-term relief to consumers.
Ramagwede urged Finance Minister Enock Godongwana to review the government's approach to fuel pricing and consider the impact on workers' salaries and the overall economy. He argued that the government could reduce the fuel levy by R3 per liter without compromising its revenue, citing the billions of rand spent on bailing out struggling state-owned enterprises each year.
The AA also expressed concern about the rising cost of diesel, which has doubled in price since January, from R17 per liter to over R34 per liter. The CEF's predictions of further price increases, ranging from R2.56 to R2.91 per liter in November, have added to the uncertainty. The AA called on the government to review the pricing formula for fuel and explore ways to reduce costs.
The AA also raised concerns about the performance of PetroSA, the state-owned oil refinery in Mossel Bay, which has been operating at a loss since 2020. The organization urged the government to revisit the pricing structure for fuel and explore ways to revitalize PetroSA. The CEF was called upon to develop a strategy to upgrade storage facilities and secure the future of PetroSA.
In conclusion, the AA's call for the immediate removal of the fuel levy reflects the growing concern among citizens about the impact of rising fuel prices on their livelihoods. The organization's proposals aim to provide relief to consumers and stimulate economic growth. The government's response to these proposals remains to be seen.
Key points
- The Automobile Association of South Africa (AA) has urged the government to immediately remove the fuel levy to cushion the recent surge in fuel prices.
- The AA proposed abolishing the Road Accident Fund (RAF) levy and exploring alternative revenue streams for the government.
- The organization also called for a review of the pricing formula for fuel and the revitalization of PetroSA, the state-owned oil refinery in Mossel Bay.
