News Room

Breaking: Savage Fuel Price Hike To Hit On Wednesday

Author: Jason Snyman
Date: 2019-03-04
Brace yourself, South Africa, we're in for a rough one. There's a massive hike in the fuel price just a day or two away, and the country is under Tax Attack. We took a look at how much fuel is going to cost us come June, and it's not pretty.

There are only three guarantees in life; death, taxes and that pack of elbow macaroni that will stay in your kitchen cupboard until the day you move. Unfortunately, the South African government will use one of those to beat you over the head with until you’ve got a detached retina. 

Tax is like a subscription to your country, one that you’ll never be able to cancel, no matter how terrible the service becomes. We here in sunny South Africa have been taxed quite mercilessly – considering all the absolute nothing that we’re actually getting for it – and by the looks of it, it’s only going to get worse. 

For the most part, we’ve been quiet and taken every new tax and tax increase to come our way, but South Africans are at their tax breaking point, and it could only be a matter of time before the final toyi-toyi topples the Union Buildings. 

We’ve covered some of the other tax changes – and new bills being passed into law – in other articles, so we won’t be focusing too much on that here. 

Instead – yes – we’re set for another massive fuel price hike this week. Let’s take a look at the why and the how much and why it’s only going to get so much worse.

The Carbon Tax Bill – Paving The Way For Price Hikes

Early February saw the Standing Committee on Finance adopt the Carbon Tax Bill. Now, at face value, the Bill seems quite inoffensive – and may even be welcomed under different circumstances – but the problems become clearer the closer you look. 

The underlying purpose of the Carbon Tax Bill is to provide motivation for both consumers and carbon-heavy industries to adjust their behaviour and go a little greener – thereby resulting in a reduction of emissions. 

It could also be seen as a blatant and heinous excuse for raising tax revenue, depending on how you look at it. 

While the Carbon Tax is clearly aimed at industry, there has, naturally, been a knock-on effect that will be felt by all South African consumers. Petroleum producers and refiners, after all, have to factor this tax into their value chain assessment – particularly on diesel, due to diesel’s higher carbon intensity. 

For liquid fuels, we now know that the carbon tax will run at 9c / litre for petrol and 10c / for diesel – expected to come into effect from 5 June. 

With the addition of the carbon tax, taxes now make up the highest proportion of fuel prices, ever. And if that isn’t quite enough – we may soon feel the full effect of the carbon tax in our electricity bill as well.

Fuel Levies – The Heavy Hitter

In addition to the carbon tax, we’ve also seen another huge hike in the general fuel and Road Accident Fund levies. That means exactly what you think it means – we’re about to start paying another massive chunk of our petrol bill to the government, so that Treasury can continue to flush it down the Eskom toilet.

As announced by Finance Minister Mboweni in the Budget Speech last month, the general fuel levy is set for an increase of 15c / litre on the 3rd of April – and the RAF levy will also see an increase of 5c / litre on the same date. 

Consumers currently pay R5.34 towards indirect taxes on every single litre of petrol bought, and R5.19 on every litre of diesel.

R3.37 (petrol) and R3.22 (diesel) of this goes to the general fuel levy – an easy tax collection method that the South African government has exploited year after year after year. R1.93 – for both petrol and diesel – currently goes to the RAF levy, as well as an additional 4c for customs and excise taxes. 

With the increases announced in the Budget Speech – including the carbon tax – the levies will increase by a combined 29c for petrol and 30c for diesel, and we’ll be paying R5.63 and R5.49 in taxes, per litre, for petrol and diesel, respectively. 

This means that if you drive a vehicle with a 50-litre tank, you’ll be paying around R281.50 (petrol) or R274.50 (diesel) in tax, every time you fill up. 

Oh, and the fun doesn’t stop there, folks – we’ve also seen a 5% increase in toll fees all across the country. You’re taxed on the fuel you buy, you’re taxed on the fuel you use, you’re taxed on the air you breathe and you’re taxed on the pothole-riddled roads you’re driving on. 

Oh, And Then There’s The Regular Old Increases, Too

What you’ve heard is true. Before the carbon tax and fuel levies arrive to finish us all off in April and June, we’ve got another massive hike to deal with right now – coming into effect on Wednesday, the 6th of March.

Thanks to the escalation of Brent crude oil prices – and the Rand just doing what the Rand does best, which is absolutely nothing – we’re about to experience another two (at least) months of consecutive price hikes. Increases are coming thick and fast. 

The SA petrol price will see a substantial increase of 74c / litre, while diesel will be hiked up by a savage 93c / litre. Likewise, illuminating paraffin – used by low income households for cooking, heating and light, will be increased by 76c per litre. 

This puts our fuel at the following prices in March: 

• Inland 93 Unleaded at R14.60 / litre; 

• Inland 95 Unleaded at R14.82 / litre; 

• Coastal 95 Unleaded at R14.23 / litre;  

• Wholesale 0.05 diesel at R14.05 / litre inland and R13.56 coastal;

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