Reduction in fuel levy will impact fiscus, warns Treasury
National Treasury is considering a number of interventions
to tackle soaring fuel costs.
Revising the Road Accident Fund Levy would be a short-term solution.
Treasury economist Alia Cassim said, " The levies that the treasury regulates make up just around 30% of the price," Treasury economist Alia Cassim told MPs on Tuesday.
"There have also been above-inflation fuel taxes which have contributed to the substantial rise in the fuel price."
The departments of Finance and Energy briefed Parliament’s Portfolio Committee on Energy on Tuesday amid an outcry after fuel costs rocketed to record highs.
READ: Russia-Ukraine war 'will hit our pockets'
Treasury says prices at the pumps could rise by R3 a litre if the conflict between Russia and Ukraine continues.
Cassim told MPs that a reduction in the Road Accident Fund levy is possible. She says a one-off reduction of between 3 and 18 cents per litre could be introduced immediately.
"A reduction in the level of the fuel levy will have implications with the fiscus and any lost revenue will have to be recovered through alternative sources.'
"The National Treasury is also considering reviewing the RAF levy changes and operational model of the fund. I accept it to improve the cash position by 2025."
