Finance Minister Enoch Godongwana says the government's long-term aim is to remove levies on petrol, but he gave no timetable and acknowledged that the lost revenue would have to be replaced.
Speaking in a radio interview a week after the mid-term budget policy statement, Godongwana said the fuel levy system needs to change and that the way the Road Accident Fund (RAF) is financed should be reconsidered, according to a report of the interview.
What the levies are worth
- The RAF levy is about R2 a litre, Godongwana said. He said removing it would significantly lower fuel prices and that the fund should be financed differently.
- The general fuel levy raises about R80bn for the national fiscus, he said. Phasing it out would cost the state that amount.
He acknowledged the gap, saying how to close it is "a discussion we probably will have".
Separately, a levy cut of R1.50 a litre on petrol and R3 on diesel is due from 4 November, as Insight Factor has reported.
What he did not say
Godongwana gave no date, no replacement revenue source and no detailed plan, according to the report. He also backed expanding domestic refining capacity so that South Africa does not rely on imported refined fuel, describing it as a security issue.
Some online headlines have put a figure of more than R6 a litre on removing the levies altogether. We could not verify that figure from the interview report and do not use it here.
