DA proposes cutting levies by 50% to cushion looming fuel price hike

The Democratic Alliance (DA) is making a radical proposal to cushion the blow of the imminent fuel price increase, which involves cutting the general fuel levy and the Road Accident Fund levy by 50%.

It’s suggesting surpluses from the Compensation Fund and the Sector Education and Training Authority (SETAs) be used to fund the shortfall in revenue, which will be caused by slashing the levies.

The party’s Mark Burke said this could provide South Africans with at least three months of relief at the pumps, caused by the latest Middle East conflict.

As from next month, motorists will be paying a record-breaking R5 more per litre of petrol and R9 more for diesel.

Last month, the Finance Minister also announced a 21 cents per litre increase in the general fuel levy.

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The DA’s Mark Burke said there are ways to limit the impact the soaring oil price will have on ordinary South Africans and the broader economy by reducing fuel levies.

“Combined these two levies contribute R6.35 to the overall price of fuel, and consequently a 50% reduction, would dampen increases by R3.17.”

Burke said the party is not oblivious to the impact its proposal will have on tax revenue, but digging into unused funds from the Compensation Fund is not an unreasonable ask.

“In its 2024/25 annual report, it applied to retain a R21 billion surplus, despite receiving a disclaimed audit opinion.”

The controversial SETAs are also holding onto more than R6 billion in surplus funds, which the DA calculates could provide a further month of fuel price relief.

The government put a freeze on the fuel levy four years ago to deal with price shocks at the time.