The tax holiday on fuels that was introduced to help combat South Africa’s rising petrol prices is set to end at the end of May, and it won’t be extended.
Gwede Mantashe, Minister of Mineral Resources and Energy, announced last week that the current tax cut on the general fuel levy (GFL) will not be extended beyond 31 May 2022, reported Fin24.
The tax holiday was introduced in April in response to growing public concern over the skyrocketing prices of fuel in South Africa, reducing the GFL by R1.50 per litre in an effort to alleviate the financial burden motorists were facing at the pumps.
The result was that petrol prices only rose by 28c/l and 36c/l for Petrol 93 and Petrol 95 in April, respectively, and prices even saw a small decrease of between 12-15c/l in May.
Petrol prices for June are already expected to see a jump of R1.98 per litre, meaning that the return of the full GFL could see petrol prices surge as much as R3.48 a litre.
The anticipated hike in petrol prices is mostly attributed to a weakening Rand, rising international oil prices, and the government’s constrained finances, according to Fin24.
What you can expect to pay
The expected fuel price adjustments for June, according to the Central Energy Fund, are as follows:
- Petrol 93 – R1.93 per litre
- Petrol 95 – R1.98 per litre
- Diesel 0.05% – R1.63 per litre
- Diesel 0.005% – R1.60 per litre
However, these adjustments still factor in the reduced GFL.
Therefore, a further R1.50 could be added to these figures come June, meaning fuel prices could see the following adjustments:
- Petrol 93 – R3.43 per litre
- Petrol 95 – R3.48 per litre
- Diesel 0.05% – R3.13 per litre
- Diesel 0.005% – R3.10 per litre
To illustrate what this price adjustment will mean to the average motorist, we looked at how much it will potentially cost to fill up the VW Polo, one of South Africa’s most popular cars, in May and June.
The May inland price for Petrol 95 is R21.84, equating to a cost of R873.60 to fill up the Polo’s 40-litre tank.
With June’s expected price hikes, it may soon cost a staggering R1,012.80 to keep those wheels turning in a worst-case scenario.
However, it must be noted that the official fuel adjustments in June will take into account the entire month’s data, such as exchange rate fluctuations, changes in oil prices, the Slate Levy, and the full GFL, meaning they could look significantly different to the mid-month statistics.
Join the discussion