This sounds more like the sweet relief we’ve been craving. As revealed during a Parliamentary Portfolio Committee meeting on Tuesday, the Department of Mineral Resources and energy is now considering a ‘petrol holiday’ for all South African motorists – in a move which would ease our fuel prices dramatically.
What is a petrol holiday – and how would it ease our crisis with the fuel prices?
A petrol holiday – or tax holiday, according to official documents seen by TheSouthAfrican – would temporarily halt the requirement for consumers to pay into the General Fuel Levy and Road Accident Fund.
These taxes on our petrol account for almost one-third of what we’re paying at the pumps. But, as fuel prices continue to spiral towards new, record-breaking heights, the government has been forced to consider alternative action.
“The Minister of Mineral Resources and Energy, in collaboration with the Minister of Finance, should develop mechanisms to address fuel increases. The should consider a ‘tax holiday’ on all petroleum products. No matter how costly this could be, the department would be asked to keep this in place for TWO MONTHS.”
Parliamentary Portfolio Committee on Mineral Resources and Energy
How much money would a petrol holiday save us?
Fuel costs are still soaring, and April is set to be another painful month at the pumps. However, should the department’s proposed plan of action come into play, it would go a long way towards easing the burden:
- The General Fuel Levy sits at R3.93 per litre.
- The Road Accident Fund also accounts for R2.18 per litre.
- A ‘petrol holiday’ would, therefore, take R6.11 OFF each litre of fuel sold in Mzansi.
- Consumers across the country are paying roughly R21p/l to fill up their tanks.
- On that basis, it means that 30% of our total fuel expenditure is going towards taxes.
Fuel price for South Africa set to skyrocket in April
However, for those of you already dreaming about R15-per-litre at the pumps, we’ve got something of a reality check to deliver: Fuel prices are set to rise by around R1.90p/l for petrol, and R3p/l for diesel in April. If the petrol holiday isn’t enforced by next week, some consumers could end up paying more than R23-per-litre for petrol.
Therefore, a potential break from tax levies may only take the prices down to something like R17-per-litre for petrol – a figure that was a record high for Mzansi not too long ago. More increases are likely to come in May too – eating away at the breathing space a possible R6-per-litre discount would give us all.