Fuel price set to rise in May: Will govt extend R3 fuel levy cut?

With fuel prices most likely to rise again in May, questions remain over whether Finance Minister Enoch Godongwana will extend the temporary cut to the fuel levy.

Mark Burke, Democratic Alliance spokesperson on Finance, said that the government is considering extending the relief fuel levy for another two months.

"It's not that difficult, and it should be done,” he said.

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He said that while an extension would place additional strain on the fiscus, it could be funded in a fiscally neutral way without adding pressure on consumers.

The temporary R3 per litre fuel levy cut for April is estimated to cost National Treasury approximately R6 billion in foregone tax revenue. 

RELATED: Temporary R3 fuel levy cut raises long-term economic questions

Burke said the relief could be funded for at least six months by tapping into the Sector Education and Training Authorities (SETAs) and the Compensation Fund, which he said has a surplus of R21.7 billion.

“There are pots of money sitting around that we could be tapping into to be able to fund this relief for South Africans at a time when it is desperately needed.”

The deregulation of the petrol price has also been raised, with a proposal to allow petrol stations to set their own prices for 93 and 95 octane petrol.

Burke said that while deregulation has its merits, it is unlikely to provide major relief at the pump because filling stations in South Africa do not make most of their revenue from fuel sales.

“For the most part, petrol stations make their revenue from forecourts and the additional items you can buy there. So, we have to be realistic: right now the world is facing higher fuel prices, and South Africa is suffering as well.”

RELATED: Government can’t afford long-term fuel support, finance minister warns

To listen to Burke in conversation with CapeTalk’s Lester Kiewit, click the audio player below: