Hefty fuel increases expected for April

Petrol_pump_mp3h0354

MOTORISTS are warned to gear up to pay significantly more for fuel as the annual tax increases come into effect on 1 April, following a hike in international bulk prices of petrol and diesel this past month.

Finance Minister Pravin Gordhan announced the Fuel Levy increase of 30 cents a litre during his budget speech three weeks ago.

Tax collected on every litre of fuel sold was bulked up from R2.55 to R2.85 this year.

But with added pressure from rising international bulk refinery-gate prices of petrol and diesel, Solidarity predicts the price of a litre of 95 octane petrol will rise by about 83 cents, and 93 octane petrol will go up by about 79 cents.

Diesel could surge by as much as 93 cents per litre, the union said.

The Automobile Association stated the total cost of fuel will be adjusted monthly depending on various factors, including the international petroleum prices and the Rand/US Dollar exchange rate.

‘The Basic Fuel Price (BFP) is calculated based on costs associated with shipping petroleum products to South Africa from the Mediterranean area, Arab Gulf, and Singapore.

‘These costs include insurance, storage, and wharfage, the cost to use harbour facilities when off-loading petroleum products into storage facilities.

‘This month, these costs totalled R4.70 per litre for 93 unleaded petrol.

‘Other costs associated with the petrol price include transport (from the harbour to other areas), customs and excise duties, the retail margins paid to fuel station owners, and secondary storage.

‘Importantly, these other costs also include the Fuel Levy, and the Road Accident Fund (RAF) Levy.

‘This month, these totalled R6.76 (for inland users) per litre for 93 unleaded petrol, and of this, R2.55 was allocated to the Fuel Levy, and R1.54 was allocated to the RAF Levy.

‘This means that for every litre of petrol costing R11.46, R4.09 (or almost 35 percent) is allocated to different government levies and in April, this will increase to R4.39 per litre.’

Using this formula, AA expects that filling a 50-litre tank with 93 unleaded petrol will cost about R573, of which R127.50 will go directly to the Fuel Levy and R77 going to the RAF (road accident fund) Levy, giving a combined total of R204.50.

  AUTHOR
Mia Moorcroft
Journalist

Latest News

COMMENTS

agrieco_zululandbaywatch_eyethueasternwatchgetit_zululandnorthern_eyethuzululand_eyethulooklocal.co.zaAutodealer.co.za
Top
Recommended Story
petrol_607012542
Fuel price increase kicks in at midnight