Budget Speech 2018: Motorists in the crosshairs

Petrol Price

The 2017/2018 Budget Speech was delivered this week and it's not good news for motorists. Read about the increases here.

According to the Automobile Association of SA (AA), the 52 cents per litre increase in the General Fuel and Road Accident Fund levies, are "of great concern." The increase is 11% on top of the current levies and will come into effect on the 1st of April 2018. Worse news still, VAT has been increased from 14% to 15%. The Minister of Finance, Malusi Gigaba, announced that the General Fuel Levy will increase by 22 cents from R3.15 to R3.37 (7% increase), and the RAF Levy will increase by 30 cents from R1.63 to R1.93 (18% increase).

Despite the AA doing its best to urge the government to be mindful of hikes to the levies as the poor will be hit the hardest, the government is pressing ahead regardless. “At the time we also argued that any increases should be in line with inflation which, we note today, is at its lowest since March 2015 at 4.4%. Instead, the increases are sizable, and more than double current inflation,” says the AA.

Using current fuel costings for both inland and coastal, the increases now comprises 38% and 39% respectively for a litre of 93 unleaded petrol. Right now, a litre of unleaded 93 octane costs R13.90 for inland customers, which will now increase to R14.42. For coastal motorists, the current price for 93 unleaded is R13.49, which will increase to R14.01. However, as we know, the fuel price is volatile, so the actual amount we're likely to pay may change.

This big increase of 52 cents per litre pretty much decimates the 30 cents gain in January 2018, but there's a glimmer of hope as we go into March 2018 as the AA predicts a decrease of 28 cents, due mainly to the Rand gaining in strength.

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