‘That horse has bolted’ - Outa says govt too slow on fuel levy solution for e-tolls
The Organisation Undoing Tax Abuse (Outa) says it will never endorse an increase in the fuel levy as a means to pay off e-toll debts.
Transport Minister Fikile Mbalula on Thursday said cabinet had approved a decision to add the costs of the controversial e-toll system to the fuel levy.
The plan was however abandoned due to a series of fuel price hikes.
CEO Wayne Duvenage says the organisation is aware of the discussions in government around the fuel levy.
"We are aware that the e-toll decision has already been made by the cabinet, which has been commented on by the minister several times since last year.
"We are also aware that this decision would most likely have involved an increase in the fuel levy to generate the necessary revenue to pay for the maturing Gauteng Freeway Improvement Project bonds, as was confirmed by the minister.
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"However, the fuel levy option they had planned has become a headache in today's environment of soaring fuel prices.”
In 2011, Outa proposed an increase of 12c to the fuel levy but the proposal fell on deaf ears.
Duvenage says the government's timing is a little too late.
"That horse has now bolted. Outa will never endorse an increase in the fuel levy at this late stage to cover the GFIP bonds.
"The option of a 10c increase in the fuel levy was proposed by us in 2011, when the fuel levy was R1.78 per litre, and was viable back then.
"Had they followed our advice, and allocated the additional R2.2 billion raised per annum from a 10c fuel levy increase to the GFIP bonds, the R18 billion borrowed for the overpriced freeway upgrade would have been settled by now."
In response, the Department of Transport labelled Outa's statement as a misrepresentation of what Mbalula told the media on Thursday.
"The Minister of Transport instead alluded to cabinet being cognisant of the current challenges within the energy and fuel sector, and that an increase on the levy to cover GFIP Bond shortfalls would not favour motorists of this country."
Mbalula: “There is no government which will raise fuel prices to its citizens deliberately."
A decision on e-tolls is expected to be announced in October.
