SANRAL proposes scrapping the fuel levy?

SANRAL’s advertising claims that a fuel levy is not sustainable; citing amongst other things that it was introduced in the 1970’s and that fuel efficient vehicles like hybrid and electric vehicles are set to become prolific.

SANRAL’s argument is severely flawed in many respects; not least of all is their reliance on the argument that fuel efficient vehicles will soon become commonplace in South Africa. The last time we looked, Heavy Goods Vehicles, which do the most damage to roads infrastructure, consume a large proportion of fuel sold in South Africa and there are currently no hybrid or electric Heavy Goods Vehicles in use in South Africa.

Furthermore the average new vehicle sales monthly in South Africa represent a mere 5.9% of the entire current, but growing vehicle population. In August 2013, 56 112 new motor vehicles were sold and South Africa's best-known hybrid vehicle, the Toyota Prius, sold just 3 units.

The proportion of average South Africans who can afford to purchase new motor vehicles remains very low indeed and even if cheap hybrid Indian imports like the concept Tata hybrid which Mr Nazir Alli referred to at a Mail & Guardian debate last year; costing just $5 000 apiece were to suddenly hit South Africa’s market, it is extremely doubtful that anything even remotely representing a quarter percent of the South African car fleet would be replaced with them inside the next decade or more. Even if this were to happen, the easy solution to the problem would be to increase the fuel levy proportionally.

We are acutely aware of the fact that planning for roads infrastructure needs to extend beyond the next decade; however medium-term problems, like paying for the “Gauteng Freeway Improvement Project” (GFIP) presents a problem with respect to how they are going to be funded right now.

If, as it would appear they are, SANRAL is saying that the fuel levy should be scrapped, then that is a completely different kettle of fish and we would be forced to agree with them – given the fact that it has been acutely demonstrated that our fuel levy is not being used for roads infrastructure as it should be.

South Africa consumed approximately 11.3-billion litres of petrol and 9.1-billion litres of diesel during 2009.  In 2012, these figures increased to approximately 11.7-billion litres of petrol and 11.3-billion litres of diesel, representing an increase of around 3.5% in petrol sales and a whopping 24.2% increase in diesel sales over the three year period.  Therefore, SANRAL’s claim that collections based on a fuel levy are “unsustainable” since they are declining is nonsensical at best and an outright lie at worst. They seem to forget that these figures are publicly accessible, unlike their so-called “research”, which they like to keep a “State secret” or make loose reference to when they present their arguments.

If the fuel levy were to be scrapped tomorrow and replaced countrywide with the e-tolls that SANRAL believes is the solution for Johannesburg and Tshwane (not Gauteng as they claim), then we have little doubt that most South Africans would have no problem with this. The effect of scrapping the fuel levy would be to bring its price at the pumps down by 212.50c a litre on petrol and 197.50c per litre on diesel. This relief would be most welcome by most, if not all motorists and then SANRAL could go forward with their policy of raising bonds to secure loans to fund infrastructure development and charge users to drive on the roads they build.

But it would appear that SANRAL and Treasury wish to have their cake and eat it by retaining the fuel levy and additionally introducing e-tolls, or what they refer to as the “user pays principle”. On this point, we are not going to see eye to eye – ever – and therefore we call upon SANRAL and Treasury to make a choice – Either it’s going to be a fuel levy or Tolls/e-tolls. They simply cannot have it both ways and continue to engage in false advertising like they did today.

Best Regards,
Howard Dembovsky
National Chairman - Justice Project South Africa (NPC)
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