Efforts to reduce fuel hike may lead to higher petrol prices in coming months
Could this cut potentially have a ripple effect in the coming months?
There's no doubt that the one thing that everyone has been talking about it is the price hike that is coming...
Owning a car and using public transport has become stressful with regards to the cost factor.
At the beginning of the week, we heard about the Fuel Retailers Association suggesting that government "scrap the existing Road Accident Fund in its current revenue structure and replace it with a mandatory motor insurance flat fee – not linked to the petrol pump price." (Business Tech)
In case you are wondering what this has to do with the rising fuel prices, there is a Road Accident Fund tax that is added to the fuel price.
"Data from civil society group Outa shows that the RAF levy made up 5% of the price of petrol in 2009, and generated around R9 billion per annum for vehicle-related injury compensation. As of this year, this levy makes up more than 10% of the fuel price and contributes close to R45 billion to the RAF." (Business Tech)
Read more: Ten smart ways to help you save on fuel
Following this, it was announced by government that there will now be a temporary R1.50 per litre reduction in the fuel levy. Due to the rising oil prices, government has made a decision to cap the fuel price to help consumers.
This decision allows fuel retailers to charge less than the maximum price, which will in turn create competition amongst the fuel retailers, which potentially could bring the fuel price down.
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As much as any decrease can help us out, what are the repercussions to this R6-billion loss in tax revenue for the country? Could this mean a higher price hike in the future?
Quite literally, as much as this R1.50 dip has been implemented from 6 April to 31 May, it takes inland motorists back to the price they were paying in January. Better that than more...
On that note, in case you missed it and you are living under a rock to avoid the pressures of the new month, today, in honour of April Fool's Day, East Coast Radio is changing things up and hosting April Fuel's Day.
Every hour on the hour from 6:00 to 19:00, we are giving away a R1,000 fuel voucher to a listener who spots the driving/road trip song and sends a message to us on WhatsApp (WhatsApp your name to 061 700 0800 to stand a chance to win a R1,000 fuel voucher).
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