Govt under pressure to review fuel prices as motorists face another hike

From midnight on Tuesday, you will have to fork out R2.37c for a litre of petrol - while if you use diesel, then you will part with R2.31c.

Picture: Eyewitness News

JOHANNESBURG - Government is facing growing pressure to review the current fuel price model as motorists face yet another massive price hike for petrol and diesel.

The Energy Department announced the latest price increase on Monday.

From midnight on Tuesday, you will have to fork out R2.37c for a litre of petrol, while if you use diesel, then you will part with R2.31c.

The Democratic Alliance (DA) is among those calling for a review of the fuel price model.

The party said that deregulation of the fuel sector should also be considered.

However, one economist, Azar Jammine, said that government's hands may be tied.

"The fuel levy is the fourth largest source of government revenue at the moment after personal tax and company tax. You would have to replace that 5% that goes out as total tax revenue that government would forgo if it got rid of the fuel levy with other forms of raising taxes and it's not that easy to contemplate what to do... raise the rate of VAT? Eventually, you will be robbing Peter to pay Paul," Jammine said.

Meanwhile, the Organisation Undoing Tax Abuse said that it was disappointed that the government had halved the relief on the fuel price levy.

On Monday, the Energy Department announced the temporary reduction in the fuel levy would drop from R1.50 per litre to 75c.

Governemnt is expected to stop all fuel levy reductions next month.