South African motorists can rejoice with the knowledge that the national treasury will not raise the General Fuel Levy (GFL) and Road Accident Fund (RAF) Levy in 2023.
In his annual budget speech, finance minister Enoch Godongwana said there are “no major tax proposals in this budget” as revenue collection for the 2022/23 financial period is set to total R1.69 trillion, surpassing estimates by a whopping R93.7 billion.
“The improvement in revenue is due to higher collection in corporate and personal income taxes, and in customs duties. This partially offset the lower value-added tax estimates,” he said.
As such, the GFL will remain at R3.94 per litre and RAF levy at R2.18 per litre.
Together with the Slate Levy, which stands at 17.54 cents per litre for the month of February, taxes on petrol and diesel in South Africa sit at approximately R6.30 per litre, or around 30% of the price of all fuel sold in the country.
Godongwana additionally announced welcome relief measures for food manufacturers reliant on diesel.
“To ease the impact of the electricity crisis on food prices, the refund on the Road Accident Fund levy for diesel used in the manufacturing process, such as for generators, will be extended to manufacturers of foodstuffs,” said the minister.
“This takes effect from 1 April 2023 for two years.”
More petrol price hikes on the horizon
Despite the minister’s positive announcement, as of 22 February, data published by the Central Energy Fund (CEF) indicate that both petrol and diesel are set to become more expensive in March.
The former is poised for a jump of up to R1.28 per litre while the latter could rise by as much as 30 cents per litre.
The anticipated price hikes are largely a result of an unfavourable rand/US dollar exchange rate during the first few weeks of the month, as well as rising international petroleum product costs.
On 1 February, the rand was trading just above R17.30/dollar, trending upwards to peak at around R18.30/dollar on 21 February. At present, these fluctuations will add approximately 43 and 48 cents per litre to petrol and diesel in March, respectively, according to the CEF.
Similarly, international petroleum product prices have been unpredictable over the last few months negatively affecting local fuel prices along the way.
The CEFs data shows that adverse movements will contribute between 79 and 85 cents per litre to petrol in March if market conditions remain consistent, though on the bright side, these oil price changes are expected to shave roughly 18 cents off the price of every litre of diesel.
It must be noted that these predictions only serve as indications of what the fuel price will do in the current economic landscape, but are not the official changes that will come into effect next month. The final adjustments account for the entire month’s data including any possible changes in the Slate Levy and retail margins.
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