Aug 8, 2022

Mawazo Writing Africa

Writing about the main

Government scrapped plan to add e-tolls cost to fuel levy after things grew ‘messy’: Mbalula

Transport Minister Fikile Mbalula says the government scrapped plans to add the cost of e-tolls to the fuel levy after things got “messy”.

Responding to the media on Thursday, Mbalula said the cabinet abandoned the plan after Russia invaded Ukraine, which led to record fuel prices.

He said a final decision on the future of e-toll would be announced in October when Finance Minister Enoch Godongwana delivers the Medium-Term Budgetary Policy Statement (MTBPS).

“The Cabinet has a decision was made about e-toll which leads us towards the fuel levy. The history of fuel delivery has become very messy over time and among other things it is no longer an option for us to consider. Fuel prices have risen and the conflict between Russia and Ukraine has aggravated our situation,” Mbalula said.

“We’re not going down that path. We are evaluating options related to e-tolls which we will finalize before MTBPS.”

Mbalula said he has “many promises and concessions” related to e-tolls did. Tolls when he was “almost certain” a decision would be made.

“That was last year when Tito Mboweni was finance minister and now it’s Godongwana. So that’s for sure, we agreed last week. Our teams are working on the issues before we make a final decision.”

Fuel Tax Relief Extension by R1.50

The Organization Undoing Tax Missuse (Outa) this week requested that the R1.50 fuel tax exemption be extended to July.

The Fuel levy deferral of R1.50 per liter will apply for April, May and June.

“Should Godongwana change this as planned from 6 July to 2 August to a deferral of 75 cents per litre, we can expect a petrol price increase of around R2.50 in July, which has pushed the domestic price of 95 octane down from R24.17 per liter to around R26.70,” said Outa.

“Although we understand the negative impact of approximately R2.0.8 billion in tax revenue lost to the Fiscus for each month that the R1.50 per litres remains in force. We believe that while petrol prices remain above R22 per litre, the Minister would be wise to maintain the full reduction of R1.50. ”

The organization said Godongwana should not lower the July fuel levy deferral to 75 cents, but wait until geopolitical factors combined with an improvement in the rand exchange rate lead to a Significant reductions in the price of petrol.

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