Petrol decrease now, worries later

Motorists are rejoicing at the 70 cents a litre drop in the petrol price as of March 3 (thanks largely to lower international petrol prices coupled with a stronger rand). This despite the price of diesel increasing by 15 cents a litre in the wake of rising international diesel prices.

However, the Automobile Association (AA) of South Africa has warned that those chortling with glee should probably not get ahead of themselves just yet.

Commenting on unaudited end-month data released by the Central Energy Fund (CEF), the Association said that, while the fuel price has returned to some stability, the 30 percent increase in the fuel levy announced by Finance Minister Pravin Gordhan during the Budget Speech would have a negative impact at the end of March, should there be any increase in petrol prices.

“The increased levy will add approximately R6,8 billion to the fiscus, collected from the most economically active,” added the Association, which also raised concern that government’s shortfall in revenue would once again pinch from the motorist’s pockets.

The AA pointed out that the combined increase in the fuel levy over the past two budgets (2015 and 2016) has amounted to 60,5 cents a litre, with an additional 50 cents a litre going to the Road Accident Fund (RAF) since 2015.

Ouch!