The fuel levy is frequently proposed as a means to fund the Gauteng Freeway Improvement Project (GFIP) by anti-tolling groups like OUTA and COSATU.
In our view, the fuel levy is not a sustainable or long-term solution for road funding in South Africa. Firstly, money in the general fiscus is competed for by all Ministries in government and is therefore not ring fenced for road infrastructure specifically. Money for tolls on the other hand, is ring fenced for road building, repairs and maintenance.
Secondly, upping the national fuel levy is grossly unfair to people who live and work in other parts of the country, as it would mean that many millions of people would be paying for road infrastructure improvements in a province they may never even get to visit.
Thirdly, the fuel levy is skewed in favour of the affluent; the less affluent pay more as they are unable to afford newer, more fuel-efficient vehicles. Speaking of which, some studies show that 50% of all motorists worldwide will soon drive hybrid and/or electric vehicles, meaning the fuel levy continues to be a rapidly dwindling form of taxation.
Introduced in the 1970’s, the fuel levy in South Africa continues to be a major bone of contention for many motorists, with repeated calls on government to reduce it or have it scrapped entirely. The creation of an additional, provincial fuel levy will also be rejected, if the mere suggestion to do so in the Western Cape is anything to go by.
OUTA’s claim that an increase to the national fuel levy of 10c per litre in 2008 would have paid for the entire capital expenditure of GFIP by now, is misleading and we challenge its calculations on the above assumption.
Fact is, the real-world result of increasing the national fuel levy to fund GFIP would realise a further rise in inflation. The cost of all goods and services – including taxi fares – in South Africa would soar, with the poorest of the poor, again the most severely impacted.
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