Prices at the pumps could see a noticeable drop if South Africa removes the excessive taxes and levies imposed on fuels and implements a kilometre-based charge, according to Professor Stephan Krygsman, expert in Transport Economics in the Department of Logistics at Stellenbosch University.
This type of system would introduce a fair process for calculating road user costs as it is possible to differentiate between and account for various elements, for example, vehicle types, peak period charges, and charges for specific areas such as the CBD.
From a technical perspective, implementing the kilometre-based system is entirely possible. “South Africa has many problems, but technology is not one of them. In fact, we are quite advanced,” the professor told BusinessTech.
The main concern is whether the government is willing and able to implement the system while maintaining positive public perception, he said.
How it works
The kilometre-based charge utilises an on-board GPS that is capable of tracking several parameters and transmitting this data through a cellular network for calculating what each road user would pay.
The charge is based on:
- Time of day
- Vehicle type
- Vehicle weight
- Distance travelled
- Where the travelling takes place (e.g. cities or rural areas)
While Krygsman wasn’t able to provide exact savings, he and his research team are currently running a pilot project using the variable-cost method to calculate the kilometre-based charge of different vehicles, and will soon be starting another programme with a flat fee per kilometre.
Once these pilots end, the team will be in a better position to provide an accurate estimate of the costs saved, he said.
As a reference, the expert conducted a similar study back in 2016 that showed an average user charge of around 23c/kilometre, but various input elements have since changed.
However, given that the General Fuel Levy and Road Accident Fund Levy – the two largest taxes on South African fuels – currently stand at R3.81-3.95/litre and R2.18/litre, respectively, the kilometre-based system still has the potential to remove significant pressure from consumer’s wallets.
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