Temporary reduction in fuel levy ‘won’t achieve much’ – economist
Updated | By Steve Bhengu
An economist believes government could have made further cuts to the fuel tax to ease the pressure on motorists at the pumps.
Finance Minister Enoch Godongwana has reduced the general fuel levy by R1.50 for about two months.
The announcement came after experts said we should expect a fuel price hike of R2 or more per litre next week, driven primarily by the Russia-Ukraine war which has led to soaring crude oil prices.
Economist at Efficient Group Dawie Roodt says while a drop in the fuel tax does soften the blow - it isn't enough.
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"If the minister decides to reduce the fuel levy, he needs to reduce it by R2.00 per litre just to keep the fuel price unchanged. So even if he reduces to R2,00 a litre nothing is going to happen.
“The wants to achieve something he needs to reduce the levy by R4.00, which will result in a significant lower revenue for the finance department."
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