petrol price february R20 per litre

Image via ANA

It’s official: Budget Speech confirms we’ll be paying more for fuel

After relief in March, drivers will again have to fork out more for fuel after the announcement of an increase during the Budget Speech.

petrol price february R20 per litre

Image via ANA

We might not have to pay more tax, but Tito Mboweni confirmed during his Budget Speech that we will have to fork out more of our monthly incomes on fuel.

The finance minister has proposed to increase the general fuel levy by 16 cents a litre and the Road Accident Fund (RAF) levy by 9 cents a litre from 1 April 2020.  

That makes for a total of 25c on a litre of fuel.

He said the increase came as a result of inflation, as well as the accumulating liabilities of the embattled RAF.  

“To adjust for inflation, the fuel levy goes up by 25 cents per litre, of which 16 cents is for the general fuel levy and 9 cents is for the Road Accident Fund levy.

“Despite this increase, the liabilities of the RAF are forecast to exceed R600 billion by 2022/2023. We need to take urgent steps to reduce this risk to the fiscus and bring about a more equitable way of sharing these costs. 

“One option is to introduce compulsory third-party insurance.”

Hefty toll

Fuel prices are set to drop in March, however the proposed levy increase will come as agonising news to drivers.

For every litre of fuel you fill up with, R5.59 goes to taxation, of which R3.61 forms part of the general fuel levy and R1.98 is claimed by the RAF, meaning that despite the burden of inflation, South African consumers are still paying a hefty share towards taxation.

The RAF recently announced that victims can claim double what they previously could.

According to a Government Gazette, the RAF has stipulated that claimants can claim a maximum of R289 957 for loss of income, compared to the previous R160 000 limit.

The Road Accident Benefit Scheme (RABS) Bill is currently being debated in the National Assembly and is being touted as a replacement for the current system, cutting out third-party legal fees through a direct claim process.