By Loushe Jordaan Gilbert
The Minister of Mineral and Petroleum Resources Minister Gwede Mantashe said government talks to bring down fuel prices are reportedly under way. This comes as the prices are currently distorted by taxes like the general fuel levy and Road Accident Fund (RAF) levy. The minister said although petrol and diesel prices should be around R14 per litre, they currently exceed R20 per litre.
Speaking on VOC Breakfast, independent economist Ulrich Joubert said RAF is receiving a huge amount that should have been utilized elsewhere.
“RAF is in financial trouble and so is our government finances, with absolutely no relief for consumers. We are saying there is no room for increase, while at the same time calling for relief for struggling taxpayers,” he added.
Joubert further stressed how a drop in fuel prices will affect the economy.
“Should the price of fuel continue to drop, this will affect the inflation rate in a good way. However, we must remember that the price of fuel will always fluctuate as the oil prices international change on a monthly basis,” he stressed.
Meanwhile the Organisation Undoing Tax Abuse (OUTA) said the government should act and speak less when it comes to cutting fuel levies. Outa’s CEO, Wayne Duvenage, said lowering the fuel price does not simply entail scrapping two fuel levies.
“First and foremost, we would welcome it, but really it is just a pipe dream because of the fuel levy close to R4 and RAF injecting about R130 billion into the coffers of government so what will happen if those levies are taken out of the fuel prices,” he stated.
