A big hike in the SA fuel levy is on the way: analysts

Motorists should brace for a hefty fuel levy increase when finance minister Pravin Gordhan presents the budget speech to Parliament on 22 February.

Motorists have already experienced two consecutive petrol price hikes in the first two months of 2017.

Petrol has increased by 79 cents so far this year, while diesel is already up by 60 cents per litre amid rising oil prices.

Independent economist Dawie Roodt said he was almost certain that finance minister Pravin Gordhan was going to push up the fuel levy.

“The government has a R28-billion hole to fill in its budget and about the only line items left where he can levy substantial taxes are VAT and taxing the middle class,” Roodt said.

Neil Roets, CEO of debt management company Debt Rescue, said he was fearful of the impact that increased taxes and levies will have on deeply indebted consumers.

“I am convinced that we are going to see a substantial increase in the fuel levy which together with rising crude oil prices is going to cause the fuel price to skyrocket.

“We all know that when the price of fuel escalates, the prices of everything else rises in concert,” he said.

Gordhan announced a 30 cent increase to the fuel levy in 2016, taking it to R2.85.

“The fiscus will need another R15-billion in 2018-19. This will require more than routine tax increases and once again the middle class is probably going to have to shoulder the bulk of these taxes,” Roets said.

He called on consumers to take a long hard look at their own skyrocketing indebtedness and learn to live within their means.

Roets said more than half of all consumers were three months or more behind in their payments. The major culprits are credit and store cards followed closely by unsecured debt.

“It is these people who are going to bear the brunt of the government’s inability to curb spending which results in higher taxes year after year.”

Roets said the latest statistics compiled by Debt Rescue showed that personal loans still outnumber other types of debt.

This is a shift from previous periods, when store cards were the highest category for 18-20 year olds. In the age group over 65, credit cards were the most prevalent debt category. There was a slight decline in mortgages in the over 65 age group, Debt Rescue said.

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