Fuel: HOW much more are motorists in South Africa spending versus 2022
Following a turbulent two years of fluctuating fuel prices in South Africa it seems that the year ahead will hopefully be more stable.
Firstly, it was good news for fuel in South Africa this week after Finance Minister Enoch Godongwana announced no increases to the General Fuel Levy (GFL) and Road Accident Fund (RAF) Levy in Wednesday’s (21 February) budget speech.
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However, it’s not all good news. The latest unaudited figures for March 2024 suggest if the rand/dollar exchange rate remains constant, as do oil prices – an increase of 119-122 cents per litre for petrol and 124-139 cents for diesel could materialise.
UPS AND DOWNS FOR FUEL IN SOUTH AFRICA
Nevertheless, in the longer term, the news isn’t great. According to Daily Investor, quoting Standard Bank chief economist, Goolam Ballim, the price of fuel in South Africa has risen 54% in two years. What this means is that fuel cost is taking up an increasing portion of South Africans’ spending, leaving less for everything else.
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The rise in the cost of fuel in South Africa is part and parcel of a much broader post-COVID-19-pandemic spending shift, says the economist. For example, spending on home DIY has more or less collapsed since 2021. While clothing/grocery spending has equalised to pre-pandemic levels. All the while fuel has shot up 54%. Ballim termed this ‘revenge spending’, as fuel accounts for 8% of total household spending nowadays.
GOVERNMENT WELL AWARE
Amidst fear the National Treasury would hike GFL and RAF levies this week, refreshingly, the minister was all too aware of the current cost-of-living pressure the country is under. Therefore, this is the third consecutive year of no levy increases.
- GFL remains between R3.81-3.95 per litre.
- The RAF Levy stays at R2.18 per litre.
- Meanwhile, the Carbon Fuel Levy (CFL) increases from 10c to 11c per litre for petrol.
- CFL rises from 11c to 14c per litre for diesel.
This decision to keep fuel taxes mostly stagnant for 2024 will provide welcome relief for motorists in March when fuel in South Africa is expected to climb once more.
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