2024 Budget Speech

Economists predict the 2024 Budget Speech will see a General Fuel Levy and Road Accident Fund increase. Image: File

2024 Budget Speech: General Fuel Levy increase likely

As part of the 2024 Budget Speech this week (21 February), economists predict an increase to the General Fuel Levy and more…

2024 Budget Speech

Economists predict the 2024 Budget Speech will see a General Fuel Levy and Road Accident Fund increase. Image: File

The 2024 Budget Speech takes place this Wednesday, 21 February. In it, economists predict Finance Minister Enoch Godongwana will announce increases to the General Fuel Levy (GFL) and Road Accident Fund (RAF). If so, this will put further strain on the finances of embattled South Africans.

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As reported by Daily Investor, this is the opinion of financial services firm PwC. The hike to the GFL and RAF levy is anticipated to be in line with inflation and underlines the tough position the National Treasury finds itself in trying to balance the budget.


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The minister’s 2024 Budget Speech is set to take place this Wednesday, 21 February. Image: X/@SABCNews

PwC notes the last two budgets carried no increases to the levies, due to the relatively high fuel prices at the time. However – despite last month’s increase – the fuel price has been stable, putting less pressure on households, keeping the GFL and RAF levy flat.

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However, the government’s lacklustre revenue growth in 2023 dictates the National Treasury is not in a position to provide relief going forward, says PwC. Moreover, the GFL alone is the fourth largest revenue item in the government’s budget.

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It has become an increasingly important source of revenue for a faltering South African economy. Moreover, it is responsible for roughly R90 billion in tax revenue each year. And PwC expects an annual increase in fuel levies in the 2024 Budget Speech.


2024 budget speech
Motorists queue at a gas station to fill their vehicles ahead of a price hike. Image: Waldo Swiegers/Bloomberg via Getty Images

Additional levies charged at the pump make up a significant portion of the fuel price, which is already set for a large jump in March 2024. Taxes and levies make up 28% of what we pay for fuel prices in South Africa. Roughly 55% is determined by actual fuel-import costs.

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So, 55% of the cost at the pumps, according to the AA, equates to roughly R12.78 per litre, depending on the type of fuel. The wholesale and retail mark-up margin is roughly 15% of the price, amounting to R3.49 per litre. This is more transporting, storing and pumping fuel.


2024 budget speech
What goes into your tank can be broken down into several separate costs. Image: File

Moreover, the GFL and RAF levy then add 28% to the fuel price, or roughly R6.51 per litre. And R3.96 per litre of this goes directly to the National Treasury and can be used for any purpose the government sees fit.

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