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AA urges Tito Mboweni to make increasing fuel levies a last resort

With the State of the Nation Address and the debate regarding said address now behind us, we can turn our eyes to the next big political event on the calendar – the Budget Speech.

Later this week (Wednesday to be precise), Finance Minister Tito Mboweni will deliver the first budget speech for the year and the Automobile Association (AA) has urged the minister not to increase fuel levies.

As the organisation points out, previous years have seen government increase fuel levies as a way to increase revenue through tax. Doing that this year may be detrimental to all South Africans, says the AA.

“Previous years have seen higher than inflation-linked increases to the fuel levies – the General Fuel Levy, the Road Accident Fund levy, customs and excise taxes and the Carbon Tax. However, given the fact that many South Africans are buckling under severe financial constraints, such an increase this year will be more than detrimental, it could be catastrophic,” said the AA.

The AA reminds us that the General Fuel and Road Accident Fund levies are the big focus. Together, these two levies account for R5.59 on every litre of petrol and R5.47 on every litre of diesel sold.

While vehicle owners may be able to withstand an increase, the AA notes that any fuel price increase results in an increase in public transport costs.

“While a slight increase, even one in line with inflation, may not seem drastic, it has an enormous impact on the lives of consumers who rely on every cent to make it to the end of each month. These increases are therefore extremely harmful to the majority of citizens and should be considered an absolute last resort by the Finance Minister,” notes the AA.

The association said earlier this month that South Africans might be in for a fuel price decrease in March given that the Rand was weakening. However, the currency recovered from a four month low on 21st February before a dip on Monday morning.

Whether this shifting tide will have a noticeable impact on the forecasted petrol price remains to be seen.

The AA has said that any changes announced by Mboweni’s speech on Wednesday would likely only come into effect in April.

“Don’t do it Minister,” the AA concluded.

[Source – AA] [Image – CC 0 Pixabay]

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