Fuel levy increases diminishes petrol decrease

Motorists making use of petrol powered vehicles are in for some relief, because as of 2 March as the price of petrol decreases. However, the cost of diesel is increasing, as will the price of illuminating paraffin.

However, it isn’t all good news. Despite the cost of petrol going down, the new fuel levy is being implemented from 1 March 2016, meaning that motorists will still experience some form of increase, with diesel users being doubly affected. The fuel levy will be increasing by 30 cents per litre.

According to the Automobile Association of South Africa (AA), it is concerning that motorists are being called on to fund government’s revenue shortfalls.

“The National Treasury forecasts that the increased levy will add approximately R6.8 billion to the fiscus. This revenue is collected from the most economically active and heavily-taxed sector of the population,” said the AA.

The changes

The Department of Energy provided the following explanation for the price adjustments. “The average international product prices of petrol decreased whilst diesel and illuminating paraffin increased during the period under review. The crude oil price increased on average compared to the previous pricing period mainly due to rumours that OPEC (Organization of the Petroleum Exporting Countries) might cut production.  

“The Rand strengthened against the US Dollar, on average, when compared to the previous period.”                                                                                                                          

The fuel prices will be adjusted as follows:

1.        Petrol (both 95 and 93 Octane) will decrease by 69 cents per litre.
2.        Diesel (0.05% Sulphur) will increase by 15 cents a litre, and diesel (0.005% Sulphur) will increase by 14 cents.
3.        Illuminating paraffin (SMNRP) will increase by 23 cents per litre, while illuminating paraffin (wholesale) will increase by 17 cents a litre.
4.        Liquefied Petroleum Gas (LPG) will decrease by 120 cents per kilogram.

With the fuel levy increasing as of 1 March, it means that motorists will only enjoy a 39 cent reduction when the decrease in petrol and the increase in the fuel levy are both factored in. Diesel users, on the other hand, will be experiencing a 45 cent per litre increase when both increases are taken into consideration.

With the price of LPG decreasing by such a substantial amount, anyone with empty gas cylinders to fill should wait until 2 March to do so. With the winter months just around the corner and no guarantee of a further decrease for April, plan ahead and save while you can.