Fuel price: govt considers options

13 June 2008

The government is not considering cutting fuel levies, but is instead looking at other proposals to keep escalating fuel prices in check, government spokesperson Themba Maseko says.

Briefing the media following a Cabinet meeting in Cape Town on Thursday, Maseko said the Cabinet had discussed the fuel levy proposal and noted that South Africa’s levy was a specific tax which was adjusted once a year and which remained constant irrespective of changes to the fuel prices.

He said that this differed from a percentage-based duty that would fluctuate along with the changes in fuel prices.

The current levy on diesel is 111 cents and 127 cents on petrol per litre, while the Road Accident Fund Levy is 46.5 cents per litre and the Southern African Customs Union levy is 4 cents per litre.

“These levy amounts remain the same for a full year irrespective of changes in the price of fuel,” Maseko said.

He said the meeting resolved that the ministers of finance and minerals and energy should consult with a view to identifying the best, most practical ways of mitigating the impact of the rising cost of fuel on food prices and other goods and services.

Maseko said that a task team was looking at other ways to make the impact of escalating costs less, particularly on the poor.

“We are looking at, for instance, the possibility of exempting certain foodstuffs from Value Added Tax,” he said.

The ministers will present a package of proposals to Cabinet in the near future.

Source: BuaNews