Fuel tax regime will not change

• Team tasked with studying high price will be looking for ‘quick wins’

A joint team of department of energy and Treasury officials that was asked by President Cyril Ramaphosa to look into measures to address the high fuel price will not be considering changes to the tax regime.

A joint team of department of energy and Treasury officials that was asked by President Cyril Ramaphosa to look into measures to address the high fuel price will not be considering changes to the tax regime, such as reducing the fuel tax or Road Accident Fund levy, MPs were told on Tuesday.

Minister of energy Jeff Radebe and departmental officials briefed parliament’s energy committee on the composition of the fuel price and whether it could be mitigated in some way.

The fuel price is at a record high of R16 a litre.

The fuel levy accounts for R3.37 of this per litre and contributes R62.8bn annually to the national revenue fund. The Road Accident Fund Levy accounts for R1.93 of the fuel price.

Tseliso Maqubela, the department’s head of petroleum regulation, said the team had decided it would look for “quick wins” and any adjustment to the fuel levy could only take place in the next financial year.

“We have not gone to the level of discussing the fuel levy because we believe parliament has voted on this for this financial year. There is a budget that has already been approved,” Maqubela said.

He said the team strongly advised against allowing a tax holiday as experiences elsewhere in the world had not been positive.

One area where a possible reduction could be made was to scrap the demand side management levy, a surcharge paid by motorists in inland provinces.

But MPs were not impressed with the report, telling officials that they expected that by the time the teams make a final report to the ministers concerned at the end of September, they would have more to offer.

Committee chair Fikile Majola said: “We, the ordinary people, believe government can lower the fuel price next week. If there is enough will, government can lower the price and it can be done soon.”

The DA, which is running a campaign to knock R1 off the fuel levy, was also disappointed. While it is true that the fuel price is mainly influenced by the oil price and the rand-dollar exchange rate, the government did have control over the fuel levy, said DA MP Gavin Lewis.

“If the fuel levy is not part of the remit of the fuel price technical team set up by Treasury and the department of energy … we are left wondering exactly what they are discussing and whether there is any real commitment to reduce the price of petrol,” Lewis said.

ROAD NETWORK

The fuel levy and the Road Accident Fund levy are the reason why petrol is more expensive in SA than in neighbouring countries, said Maqubela. He said neighbouring countries did not have the road network that SA did, the maintenance of which is the reason for the levy.

Maqubela also cautioned against deregulation of the fuel price, which he said would probably lead to job losses as retailers would opt for self-service at the pumps, which would reduce the price.

At present the charge of petrol attendants is built into the retail margin, which is part of the fuel price determination. As many as 50,000 jobs could be lost, he said.