South Africans Relieved by Fuel Price Drop, but Many Feel Taxes Are Too High

South Africans Relieved by Fuel Price Drop, but Many Feel Taxes Are Too High

  • Gauteng's petrol price has decreased today by 68c per litre, but many South Africans are upset by the fuel levies
  • There have been various calls for the government to restructure the model that determines the prices of different fuel types
  • The basic fuel price is currently 46% of the asking price per litre. 11.6% of the petrol price is the petrol company's profit margin and 2.78% is the profit margin for the wholesale

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JOHANNESBURG - Gauteng's petrol price has decreased today (5 January) by 68c per litre, but many South Africans are upset that 32% of their petrol spend goes to taxes.

The reason for this attitude is that while the current petrol price is R19.61, it would be R9.04 per litre if tax and profit margins were removed. In coastal areas, the petrol price is 25c more than inland.

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While the petrol price decrease provides a measure of relief to South Africans, there have been various calls for the government to restructure the model that determines the prices of different fuel types, IOL reports.

Fuel, petrol, petrol price, Gauteng, South Africa, fuel levy, tax
The decrease in the petrol price has relieved some South Africans. Image: Waldo Swiegers/Bloomberg via Getty Images
Source: Getty Images

The current fuel price structure and changes that are needed

The basic fuel price (BFP) is currently 46% of the asking price per litre. 11.6% of the petrol price is the petrol company's profit margin and 2.78% is the profit margin for the wholesaler. 20% of the petrol price consists of the general fuel levy, according to Business Insider.

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A further 11% of the petrol price is assigned to the Road Accident Fund levy, which is used to compensate people who are victims of car accidents, such as people who are driven into or disabled by a car accident.

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Enoch Godongwana, the Minister of Finance, has been encouraged to rethink these costs and taxes so that the petrol price can be more affordable, which will help to boost the economy.

SA says the fuel price dropping is merely a distraction from Parliament fire

Speaking of the fuel price decrease, earlier Briefly News reported that South Africans can finally breathe a little easier now that fuel prices dropped after weeks of speculation.

The announcement was made on Monday by the Central Energy Fund, stating that petrol prices will go down by 68c and 71c for 95 octane petrol and 93 octane petrol respectively. The price of diesel will fall by 67.8c per litre while the price of illuminating paraffin will be lowered by 71c per litre.

The fuel prices dropping have been attributed to the Rand strengthening and finally putting petrol prices beneath the R20/litre mark.

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Leaked data suggests that fuel prices could decrease by at least 70c per litre in January

Source: Briefly News

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