South African motorists are bracing themselves for a massive fuel price increase on Wednesday.
The petrol price is expected to rise above R25 per litre on Wednesday, adding to the mounting burden on commuters, motorists, and consumers, the South African Institute of Race Relations (IRR) said in a media statement recently.
Internal divisions in the cabinet seem to be standing in way of a simple solution – extending the fuel levy relief previously announced by Finance Minister Enoch Godongwana, possibly followed by more structural reforms to the tax on the movement of people and goods.
Last week Minister Godongwana said “something must be done” about the looming increase in petrol taxes, which he described as a “blunt instrument” that “cuts across food prices” while generally increasing the cost of living.
Without intense and immediate public pressure to back this sober assessment, nothing will actually be done.
Cosatu and the DA have both launched public pressure campaigns to try to save South Africa from a tax hike at the petrol pump.
The DA has gone so far as to argue that the fuel levy must be scrapped, which would put R90 billion back in the hands of ordinary South Africans to beat back inflation.
Minister Godongwana also pointed out last week that while South Africa faces inflationary risks from global challenges beyond its control, “the petrol issue is adding to these risks.
And what that means is that it is constraining the amount that should be available for economic development”.
“The more the government taxes movement the more expensive it becomes to travel or trade, raising costs right across the economy. It is absurd to delay solving a problem that is placing a drag on the economy and risks bringing South Africa to a standstill. Stop the tax hike now,” said IRR head of campaigns Gabriel Crouse.