There will be no increase in either the general fuel levy or the Road Accident Fund (RAF) levy in 2022/23.

The National Treasury has, instead, turned its focus to providing an overall R5.2-billion in tax relief, in support of households and the economy.

Fuel prices in South Africa exceeded R20 a litre for inland unleaded petrol for the first time in December 2021 owing to higher crude oil prices and exchange rate depreciation.

Finance Minister Enoch Gondongwana said on February 23 that the higher prices had put pressure on the cost of transport, food and other goods and services.

The general fuel levy stands at R3.85 per litre of petrol and R3.70 per litre of diesel, while the RAF levy is currently R2.18 per litre of petrol and diesel.

Godongwana explained that, to support consumers and the economic recovery, no increases will be made to the general fuel levy on petrol and diesel for 2022/23, providing tax relief of R3.5-billion.

In combination with the zero increase in RAF levy, these changes will ensure that fuel taxes as a percentage of the price of fuel are below 40%.

The last time that the fuel price was not increased due to a change in either the general fuel levy or the RAF levy was in 1990.

Godongwana said a review of all aspects of the fuel price was needed and, to this end, teams have begun to engage on this critical work.

In 2021/22, taxes accounted for on average 34% of the price of petrol and 38% of the price of diesel – a ratio that is below that of India and Mexico, and far lower than the 60% that is common in Europe.

The fuel levy remains unchanged in 2022/23; however, due to expected growth in fuel sales volumes, government revenue is expected to increase at an average annual rate of 1.3%, from R44.7-billion in 2021/22 to R46.5-billion in 2024/25.