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Official petrol tax adjustments for 2024 announced

Finance Minister Enoch Godongwana has announced that there will be no changes to the country’s General Fuel Levy (GFL) and Road Accident Fund (RAF) Levy for 2024.

Government is well aware of the cost-of-living crisis currently putting pressure on household spending and has therefore decided to keep these taxes as they are for the third consecutive year.

“In this regard, we are proposing no increases to the general fuel levy for 2024/25. This will result in tax relief of around R4 billion. This is money back in the pockets of consumers,” said Godongwana in his annual budget speech today, 21 February.

As such, the GFL will remain at R3.81-3.95/litre for the coming financial year, and the RAF Levy at R2.18/litre.

The Carbon Fuel Levy, meanwhile, which is included as an add-on to the GFL, will increase from 10c/litre to 11c/litre for petrol, and from 11c/litre to 14c/litre for diesel.

“A discussion paper outlining proposals for the second phase of the carbon tax will be published for public comment later in the year,” said the minister.

Petrol price pain in March

The decision to keep fuel taxes mostly stagnant for 2024 will provide welcome relief for motorists in March when prices at the pumps are once again expected to soar.

Mid-month data by the Central Energy Fund indicates that petrol costs are anticipated to go up by as much as R1.30/litre come the first Wednesday of next month and diesel by a higher R1.50/litre.

These expected adjustments come off the back of higher international oil prices driven by conflict in the Middle East, coupled with a deteriorating rand/US dollar exchange rate due to factors such as load-shedding and port delays.

On the bright side, projections from Old Mutual show that fuel costs should start gradually declining later in the year.

Old Mutual expects to see lower inflation and consequently lower interest rates in 2024, as well as a slowdown in the global economy which will reduce the demand for oil.

These factors combined should see fuel become slightly more affordable in South Africa the further we go into the year.

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