South African Fuel Prices: Taxes and Levies Account for Up to 31% of Cost per Tank, Analysis Shows

…By Joseph Benjamin for TDPel Media. Taxes and levies play a significant role in determining the high fuel prices experienced by South Africans.

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The current rates indicate that a substantial portion of the cost per tank of petrol, ranging from 26% to 31%, is contributed to the government through these charges.

The Breakdown of Taxes and Levies:

According to BusinessTech, taxes and levies on local fuels contribute between R6.04 and R6.18 per liter sold in the country, varying depending on the grade and type of fuel.

The majority of the pump prices, approximately 55%, can be attributed to the basic fuel price.

However, taxes and levies account for a significant portion of the overall cost, with the government receiving a substantial share.

The Components of Tariffs:

In May 2023, the fuel tariffs in South Africa consist of various components, including the slate levy, IP Trace levy (diesel), pipeline levy (diesel), general fuel levy (GFL), road accident fund levy (RAF), petroleum products levy (petrol), and customs and excise duties.

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These charges collectively contribute to the high fuel prices experienced by consumers.

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The Significance of General Fuel Levy and Road Accident Fund Levy:

Among the numerous taxes and levies imposed, the two largest contributors, the General Fuel Levy (GFL) and Road Accident Fund (RAF) Levy, make up over 99% of all taxes on fuel.

The General Fuel Levy is allocated to the National Treasury, enabling the government to utilize the funds as deemed necessary.

On the other hand, the Road Accident Fund Levy can only be used to cover road accident claims paid out by the RAF.

These allocations have faced scrutiny from motorists and industry participants due to their impact on fuel prices.

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Impact on Rising Fuel Costs:

The consistently rising fuel costs in recent years have heightened the scrutiny of these levies.

Since January 2021, petrol prices for both 93 and 95 grades have increased by an average of 56.7%, surging from R14.56/l to R22.82/l in May 2023.

Similarly, diesel prices have risen by approximately 58.6%, from R12.81/l to R20.32/l during the same period.

The upward trend in fuel prices has sparked concerns among consumers and industry players alike.

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Conclusion:

Taxes and levies significantly contribute to the high fuel prices faced by South Africans.

The allocation and impact of these charges, particularly the General Fuel Levy and Road Accident Fund Levy, have been subject to scrutiny due to their substantial share in the overall cost per tank of petrol.

As fuel costs continue to rise, understanding the role of taxes and levies becomes essential in comprehending the factors influencing fuel prices in South Africa.

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About the Author:

Joseph Benjamin is an experienced journalist with a successful career spanning over 18 years. He has made a name for himself in the industry through his insightful and engaging reporting, and his dedication to delivering accurate and unbiased news. Joseph’s years of experience have equipped him with a keen understanding of the media landscape, and he has become a trusted voice in his field. His writing style is characterized by its clarity, precision, and attention to detail, making his articles a pleasure to read. Joseph is a dedicated professional who is committed to providing his readers with the most up-to-date and relevant news and information. He lives in Ontario, Canada.

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