NEWS & ANALYSIS

Reduce the fuel levy by R1 per litre now – Mmusi Maimane

DA leader also calls for RAF to be placed under independent and external administration

Reduce the fuel levy by R1 per litre now. Poor South Africans can’t pay for government’s failures

24 July 2018

2018 will be remembered as the year in which the ANC government declared war on poor South Africans through relentless tax increases. In addition to a one percentage point increase in VAT to 15%, increases in Income Tax, increases in “sin tax” and an increase in sugar tax, South Africans have been hit with no less than four fuel price increases in four consecutive months, in April, May, June and July – with another increase set for August.

When Cyril Ramaphosa was elected President of South Africa the price of petrol per litre was R14.12. It now costs over R16 per litre to refuel your vehicle with 95 octane unleaded petrol in Gauteng. This equates to, on average, almost R100 more every time you fill your tank. Every cent of this massive increase is absorbed by ordinary South Africans, either directly through increased transport costs, or indirectly by the resulting rising food prices. And it is the poor who bear the brunt of this onslaught as they spend a disproportionately large amount of their income on food and transport.

This is simply not sustainable. Something has to give. Poor South Africans are already stretched to breaking point by a stagnant economy and spiralling unemployment, and there is no sign of this improving any time soon. Our GDP growth figures show that our economy shrunk by 2.2% in the first quarter of 2018 – the highest quarter-on-quarter in almost a decade – and our growth forecast has just been cut from 1.7% to 1.2%. If life wasn’t already hard enough for our most vulnerable citizens, these economic conditions are going to make things even worse. Government cannot expect poor and unemployed South Africans to foot the bill for their mismanagement of our economy.

Government must also know that they cannot continue to blame these fuel price increases on “international markets”, as 33% of our fuel price is made up of two levies: the general fuel levy and the Road Accident Fund (RAF) levy. Currently levies and duties account for R5,30 of every litre of 95 octane petrol, or R265 of every 50L fuel tank.

When you factor in the staggering mismanagement and corruption at the RAF, these exorbitant levies simply cannot be justified. Last year alone the RAF made a loss of R30bn – the biggest loss of any State-Owned Entity – and they have been running at a deficit for five consecutive years. It is unconscionable that government expects poor South Africans to make up this massive shortfall.

In order to shield ordinary South Africans from the crippling effects of these fuel price increases we call on President Ramaphosa and his government to urgently implement the following:

  1. Reduce the RAF and general fuel levies by R1 per litre or 20% which will enable the price of petrol to be brought to below R15 per litre.

  2. Table an urgent debate in Parliament to consider the current structure of the RAF and General Fuel Levies, and how these can be altered to offer relief to ordinary South Africans.

  3. Place the RAF under independent and external administration in order to eradicate corruption, install competent and independent leadership, and begin the process of tackling its R160 billion backlog in unpaid claims.

We cannot afford to delay these interventions. People are already struggling to survive, and it will only get worse unless we immediately bring the petrol price below R15 per litre.

Therefore, we call on all South Africans to join us in collective mass protest outside National Treasury’s offices in Tshwane on Tuesday the 31st of July at 10am where we will be calling for an immediate reduction in the fuel levies. If enough people add their voices, they won’t be able to ignore us.

We invite NGOs, political parties, religious bodies, taxi associations, civil society organisations, and ordinary South Africans to join this protest. This is not a party-political fight. This is a civil society movement representing every South African struggling to make ends meet in these trying economic times.

Let us offer government an opportunity to stand on the side of ordinary South Africans by reducing the fuel levies and lowering the fuel price.

Issued by Mmusi MaimaneLeader of the Democratic Alliance, 24 July 2018