E-tolls: 10 times more than fuel levy

Now that President Jacob Zuma has given the go-ahead for e-tolling, the South African National Roads Agency Limited (Sanral) and its cronies are going all out to convince the public that electronic collection is so much better than applying a fuel levy to pay for Gauteng’s improved highways.

However, Brendan Seery, executive editor at The Saturday Star, says that you should do the sums for yourself to find the real difference. So let’s compare the real-world impact of a fuel levy versus e-tolling on the pockets of ordinary motorists …

The latest Sanral ads cite research done last year by economist Mike Schüssler on behalf of the Road Freight Association. Schüssler calculated that the industry would be better off paying the toll fees than a fuel levy. He said that a levy would cost an additional R700 million, whereas toll fees would cost R400 million.

Schüssler’s research apparently related to a national fuel levy. Given that Gauteng accounts for 60 percent of the country’s economic activity and that, reasonably, freight operators would pay 60 percent of that national levy in Gauteng, a Gauteng-only levy would cost them R420 million. This brings the real difference between a fuel levy and e-tolling a lot closer than Sanral would have you believe.

Furthermore, the government’s budget revenue for 2013/14 is R985,7 billion (according to economist Kevin Lings, who analysed the annual budget earlier this year for Stanlib). Of that amount, the fuel levy accounts for 5,2 percent or about R51,2 billion.

Currently the fuel levy is R2,12 per litre of petrol and R1,97 for diesel. Raising that by 10 percent, roughly 20c per litre (much higher than the level Schüssler calculated would be necessary), will bring in an additional R5 billion a year, if applied nationally.

If applied in Gauteng only (in a “user pays” scenario), the fuel levy would still generate an extra R3,1 billion (60 percent of the national figure). Assuming a generous five percent loss to administration expenses, a Gauteng-only extra fuel levy of 20c per litre will still generate R2,95 billion in revenue, more than enough to pay off the exorbitant R20 billion cost of the roads over a period of 10 years.

And this money could be applied directly to the debt owed, rather than being sent abroad to pay for the cost of collection of tolls.

Now, how will e-tolling affect you and how might you be affected through a fuel levy of 20c per litre? At first glance, Sanral’s e-toll charges (with an e-tag) look reasonable: about 15c a kilometre after discounts.

That compares fabulously well with the outrageous charges on the N3. For example, you will pay R50 to travel between Villiers and Warden – a saving of nine kilometres over the alternative route. But when you look at the e-tolls in direct comparison to the fuel levy, Sanral’s Gauteng charges don’t seem too reasonable at all.

Using the example of someone who commutes from Johannesburg to Pretoria to work, on the N1 from 14th Avenue to Lynwood, e-tolling will cost R450 a month, because that is the cap for light vehicles.

(You can calculate your own costs by using Sanral’s website)

Travelling that route – 130 km a day return, for 20 days a month – a typical light car will use 208 litres of fuel at an average 8 l/100 km. Paying 20c a litre extra as a fuel levy, the motorist will therefore pay an extra R41,60 on the fuel used to make those journeys.

That’s a difference of over R400. The e-toll will cost you 10 times what a fuel levy would. You would have to adjust the fuel levy upwards to more than double the current levy to make e-tolling cheaper.

But that’s something Sanral probably doesn’t want you to think about.

* With the kind permission of Brendon Seery, this article has been adapted from that which appeared in The Star on October 1.