Public pressure for fuel levy reprieve extension pays off

OUTA welcomes the extension of the temporary reduction in the fuel levy as desperately needed relief for motorists, commuters, business and the economy. This comes on the back of government’s statements less than 10 days ago that there would be no extension to the temporary reduction, which was met with an outcry from civil society.

The two-month extension was announced on Tuesday (see here), just hours before the monthly price change due at midnight. The general fuel levy now remains reduced by R1.50 per litre for June, then by 75c/l in July, and then the full levy  of R3.85/l resumes in August.

This extension will help restrict the increase in the fuel price, which increases to R24.17/l for 95 octane inland instead of to R25.67/l. 

OUTA wrote to Minister of Finance Enoch Godongwana in May, calling for the reduced levy to be retained beyond May (see here), due to the negative effect of the high fuel price on both individuals and the broader economy, particularly with the increase in the oil prices. OUTA had also suggested that if the temporary fuel levy reduction needed to be withdrawn, consideration for a phased-in recovery over two or three months would be a better option.

OUTA believes that keeping the fuel levy reprieve in place is an incentive to government to look for savings elsewhere within the public sector and to encourage prudent spending habits, ensuring the end of frivolous spending like the now abandoned flag project.

We are also waiting for the government to implement the review of all aspects of the fuel price which was indicated in February’s Budget.

A soundclip with comment from OUTA CEO Wayne Duvenage is here.