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AA Traveller Winter 2022

The magazine of the Automobile Association South Africa. Autumn 2022 edition. Published in English.

The magazine of the Automobile Association South Africa. Autumn 2022 edition. Published in English.

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In thenews<br />

Canthe governmentdomore?<br />

Theanswer to this question is complicated. Thereare<br />

twomainfactors that determinethe price of fuel:the<br />

internationalprice of crudeoil perbarrel, andsecondly,<br />

therand/dollar exchange rate.<br />

“Whenitcomes to thefirstfactor, thereisverylittle<br />

wiggle room,” says Layton.<br />

However,ifthe country takessteps to improvethe<br />

rand/dollarexchange rate,the pricewill drop.Infact,<br />

as badasthe Aprilincreasewas,itcould have been<br />

much worse hadthe rand notstabilisedagainstthe<br />

dollaratthe time.<br />

Thereare several ways governmentcan help<br />

strengthen therand, explains Layton.“Improveinvestor<br />

confidence,createawelcoming environmentfor<br />

internationalinvestors,cut redtapewhenitcomes to<br />

Levies andtaxes<br />

GENERAL FUEL LEVY<br />

R2,35per litre<br />

(followingthe R1,50price reduction)<br />

This taxgenerates around R90billion peryear. It’s<br />

usedtofund general governmentexpenditure<br />

programmes.Ithas been reducedtoR2,35 perlitre<br />

untilthe next price adjustmentscheduled forJune.<br />

international investments,createasafe environmentfor<br />

investors, deal betterwithunemployment…In short,<br />

create an economic climateconducive to growth.”<br />

The<strong>AA</strong>alsobelievesthatgovernmentshouldrelook<br />

fuel taxesand levies,especiallythe GFLand theRAF<br />

Levy.“Areweusing themoney generatedbythesetaxes<br />

in theright way?”asksLayton. “There aresevereand<br />

deep concerns aboutthe effectivenessofthe RAFasan<br />

organisation.It’spoorlymanaged,indebtand requires<br />

alot of intervention.And when it comestothe GFL,<br />

issues regardingcorruption andthe misappropriation<br />

of fundscomes into it as well.Governmentneedstolook<br />

at theissue of thebasic fuel priceand askthemselvesif<br />

theleviesand taxescan be betterstructured.”<br />

It seemslikegovernmentisplanningondoing this.<br />

In hisbudgetspeech, Godongwanasaidthatheand<br />

GwedeMantashe, theministerofmineral resourcesand<br />

energy,would review allthe aspectsofthe fuel price<br />

regulation.And in his speechtoparliamentinMarch,<br />

he stated that “a broader package of relief measures will<br />

be explored, andtheywill come into effect afterthe<br />

expiry of thetwo-month fuel levy reduction”.*<br />

ROAD ACCIDENT FUND LEVY<br />

R2,18per litre<br />

This is used to compensate road accident victims<br />

and contributesabout R45billion to theRAF per<br />

year.<br />

12<br />

CARBONFUELLEVY<br />

R1,53per litre<br />

An environmental taxaimed at reducingcarbon.

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