logo
Fuel levy increase raises alarm bells across the South Africa's automotive industry

Fuel levy increase raises alarm bells across the South Africa's automotive industry

IOL News27-05-2025

fuel price petrol price The Automotive industry has had mixed reactions to the announcement on Wednesday by Finance Minister Enoch Godongwana in Budget Speech 3.0 that the fuel levy would be increasing by 16 cents
Image: David Ritchie / Independent Newspapers
The Automotive industry has expressed mixed reactions to the 16 cents per litre increase in the fuel levy announced by Finance Minister Enoch Godongwana in Budget Speech.
The Automobile Association (AA) on Thursday responded to the announcement with apprehension, acknowledging the government's fiscal constraints while highlighting the immediate repercussions this levy increase will have on consumers and the broader economy.
The AA added that this levy adjustment came at a time when South Africans were already contending with high food prices, elevated interest rates, increased electricity tariffs, and persistently high unemployment.
'Fuel is a critical input cost across all sectors of the economy; any increase inevitably drives up transport and operational costs, further intensifying inflation. Lower-income households, which spend a greater share of their income on transport, will be disproportionately affected by this rise,' it said.
Adding to the chorus of criticism, Gavin Kelly, CEO of the Road Freight Association (RFA), emphasised that the increase would be felt directly by consumers.
Kelly added that transport will become more expensive, consumers will pay more, and the old adage that the government can keep increasing taxes and levies to fund its uncontrolled spending remained true.
'This means that Treasury is 'finding' R4 billion towards the R75bn shortfall from the previous iteration of the budget - however, this underscores that Treasury would rather tax citizens than cut the wasteful expenditure that has brought the country to where it is,' Kelly said.
'Government does not have money - it belongs to the taxpayers, and the time for accountability and responsibility has come. Unfortunately, from June, the cost of logistics - 85% of which is run by road freight - will become more expensive. The consumer will pay more, transport through South Africa will become more expensive.'
The South African Petroleum Retailers Association (Sapra) expressed alarm at the trade-off resulting from the cancellation of a proposed VAT increase.
Sapra's national vice chairperson, Lebo Ramolahloane, said should the Budget be approved, this will be a blow to South African consumers and businesses.
'This price hike offsets much of the anticipated June price cuts of ~23 cents for petrol and ~50 cents for diesel, as projected by the Central Energy Fund (CEF). With Brent crude prices rebounding since the US-China tariff war pause on May 12, motorists face the prospect of higher pump prices, undermining recent relief,' Ramolahloane said.
'The 16/15c/l increase impacts the positive momentum that was being enjoyed from the previous three consecutive decreases. Should there be a decrease come 4 June 2025, it will be minimal due to the proposed increase on the General Fuel Levy.'

Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

SA's rural women who save — driving social cohesion, gender equality and climate resilience
SA's rural women who save — driving social cohesion, gender equality and climate resilience

Daily Maverick

time43 minutes ago

  • Daily Maverick

SA's rural women who save — driving social cohesion, gender equality and climate resilience

Last year in South Africa, women, vulnerable individuals and rural communities collectively saved more than half a billion rands. NoWinile Lungiswa Mangquzana is a smallholder from Ntabankulu Mabofu, Eastern Cape, who grows organic produce and raises chickens. She sells her cabbages and spinach to Boxer Store and Spar, and supplies the local community with vegetables, seedlings, chickens, and eggs. Mangquzana, a successful entrepreneur, continues to grow her small business enterprise through careful saving and directed grants. She has even installed an irrigation system run on solar power for when the taps run dry, as they often do. Most middle-class South Africans still haven't managed to install solar power (3.51%) despite load shedding, which has been part of the national sensibility for almost two decades. So, what has allowed Mangquzana to allocate for this significant cost alongside the challenges of running a business that supports her family? Spoiler alert: It's not a miracle, winning the lottery, or a gift from the gods. Wealth management It's saving. A word that pairs nicely with chores, paying taxes, bureaucratic form-filling, and queuing at Home Affairs. For most of us, saving is something we should do, but we'll get to it later. Maybe. And, while some of us may be lucky enough to have parents who espoused the virtues of emergency funds, nest eggs, and cash flow, for the most part, the wealthy teach wealth management to their kids, and the poor and middle-class operate under the system of 'getting by'. However, now, more than ever, saving needs a massive rebrand. And the taglines of old, 'Save for a rainy day' and 'Waste not, want not', are simply not cut out to compete with the heady allure of consumerism and spending. Yet, in rural parts of the country, for Mangquzana and thousands of other South Africans (particularly women), saving is a growing movement. Since 2008, the NPO SaveAct, along with its partners, has empowered vulnerable individuals, provided financial education, and facilitated the formation of savings groups. SaveAct founder and executive director Anton Krone explains, 'Twenty years ago, I dared to imagine that rural women would save and take collective steps towards claiming their rights to safety and food security. Then, 1,000 women in savings groups seemed like a realistic goal to demonstrate that this would be an effective model. Now, there are more than 100,000 (savers), and we have ambitious plans to build an ecosystem of collaborators to reach two million women.' These community-led savings groups are a simple and innovative way to develop sustainable livelihoods and promote a circular economy, wellbeing and enterprise development. The system is simple enough; participants (92% women) consistently save small amounts in a collective pool and then provide each other with interest-bearing loans. At the root of the structure are community, trust, discipline, accountability, and support that foster confidence to build, grow, and improve. Krone sees the potential for growth by 'building a collaborative ecosystem of partners playing various complementary roles to enable this work to be scaled more rapidly to attain the goal of reaching two million women over the next decade. With more stakeholder engagement, the vision of social and economic justice is achievable.' Last year, the members in SaveAct's collective savings groups saved a whopping R535-million. In the current context of the country, this is a staggering feat. As a culture of consumerism, spending is promoted as an important driver of GDP, business growth, job creation, and a generator of tax revenue. However, there's a more problematic facet. Post-apartheid South Africa has framed spending and consumerism as cultural and social signifiers of success, freedom, and equality. Since democracy, aspirational culture has broadened through advertising, social discourse and the ever-present credit facilities that make it easier for low-income South Africans to participate in the cycle of consumerism. And with this participation comes massive debt. Under the allure of conspicuous consumption and aspiration is the harsh reality that most South Africans live paycheck to paycheck. Between May 2022 and May 2023, FNB estimated that middle-income South Africans spent up to 80% of their salary within just five days of payday. This finding specifically applies to earners in the R180,000-R500,000/year bracket. Responsible Finance Forum's 2025 survey indicates that about 10 million adults are over‑indebted, with 12 million struggling financially when informal debt is included. Of course, it's easy to cast aspersions on how people spend their money. However, many people are in debt not because of overspending on luxuries, but because of everyday costs, exacerbating long-term debt issues, and cultural expectations. And, while the government has introduced measures to encourage saving, these don't always translate into practice. The reality is that daily survival is more important than long-term security, which is compounded by apathy and disenchantment about the country's political, personal and economic security. As a business owner, having a bank account and access to capital are crucial. Yet, as of 2022, 15% of South Africans, or about nine million people, were unbanked. The reasons include insufficient funds, limited access to banking infrastructure (both offline and online), and a lack of identification. These problems are even worse for women and youth because of systemic barriers to financial inclusion.​ So, while South Africa has made significant strides in financial inclusion, there's still a long way to go, as Mangquzana describes. When she tried to go the traditional route to open a bank account, after months and months of waiting, she was eventually stonewalled. That's when she started with SaveAct and simultaneously entered into their enterprise development support programme. Asset-Based Community Development SaveAct applies an internationally recognised Asset-Based Community Development (ABCD) stakeholder-driven planning framework. In layman's terms, it helps vulnerable individuals and households identify economic possibilities in their local environment and contexts. There are many misconceptions about the NPO and NGO sector, such as that these organisations are just handouts or charity-based. However, organisations like SaveAct are committed to long-term problem-solving, giving communities agency and a sense of purpose. The SaveAct model is incredibly successful – savings groups in South Africa save on average six times more than groups across Africa. And it's not just about saving. SaveAct also addresses the challenges of gender inequality, economic marginalisation and climate vulnerability. SaveAct's programmes are designed to improve livelihoods and empower individuals so that women such as Mangquzana can grow their businesses while also addressing social challenges. Nolufefe Nonjeke-Dlanjwa has been a passionate programme manager at SaveAct since 2008. She explains the impact she sees in the communities she works in, 'There is nothing more fulfilling than seeing savings group members, particularly from vulnerable households, diligently putting money aside in these savings groups, strongly believing that what they want to achieve to better their living conditions is possible within realistic milestones. With financial education lessons embedded in the savings group operations, members can make well-informed decisions to better manage their household finances.' Emerging research shows how savings groups build gender equality in communities through empowerment and gender dialogue. Facilitated gender dialogue raises awareness of unequal power relations and social norms, encouraging shifts in attitudes and behaviours. Through these interventions, men become gender allies, which reduces domestic conflict and even GBV. Women in savings groups become respected members of the community through their proven ability to manage finances and invest in assets, education, maintenance, and so on. Climate resilience SaveAct also helps mitigate the damaging effects of climate change through agroecology and sustainable land management. According to the Intergovernmental Panel on Climate Change (2019), climate change is happening more rapidly than predicted. Many South Africans depend on the land for farming, and the impacts of overgrazing, unsustainable land use and biodiversity loss are worsened by climate change, particularly in regions prone to drought, erratic rainfall and soil degradation. This also has a gendered element because women are more vulnerable to climate change because of economic inequality, their role as caregivers, limited mobility because of restricted access to travel, and health impacts. In rural areas, women are also often responsible for food production and water collection. Savings groups help communities ease the effects of unanticipated climate shocks and act as a catalyst for resilience by improving cash flow and emergency relief funds. Furthermore, they help secure finances that may be needed to combat land degradation. Reversing land degradation can help adaptation to climate change, but a major challenge is mechanisms to incentivise rural communities to address it. One of the core tenets of SaveAct is sustainable land management because it has immediate and long-term benefits. Driving change Mangquzana has implemented what she has learnt from SaveAct and is committed to organic farming and sustainable methods. She uses onions, pepper water and other agroecology methods to keep pests away and is fastidious about her soil quality. Mangquzana keeps a vigilant eye on soil health and has measures in place to ensure it isn't too acidic or degrading. And, she is proud that she is passing on knowledge to the community so that she can drive change. At face value, these savings groups are just groups of women armed with notebooks. However, they are communities of practice where women drive tangible social, economic and ecological change. Krone elaborates, 'As women take advantage of these opportunities, they grow in confidence and assume control over their destinies. They are able to assert their agency and push back against systemic violence and marginalisation.' The burgeoning savings groups in rural South Africa are lived experiences of positive and sustainable change, improved social cohesion, robust gender discourse, social and economic empowerment and climate change resilience. Rural South African savings groups drive positive, sustainable change, fostering social cohesion, gender equality, empowerment, and climate resilience. These groups inspire a counterculture of long-term thinking and delayed gratification that proves financial resilience isn't a dream, but a real possibility. And real freedom is in saving. DM Dr Jaqui Hiltermann is a writer with a PhD in media studies from the University of Cape Town. She writes in her personal capacity.

‘This is about growth' — fiscal framework sails through National Assembly
‘This is about growth' — fiscal framework sails through National Assembly

Daily Maverick

time43 minutes ago

  • Daily Maverick

‘This is about growth' — fiscal framework sails through National Assembly

The 2025 fiscal framework and revenue proposals were adopted by both Houses of Parliament on Wednesday, nearly four months after the first planned attempt to table a Budget. Finance Minister Enoch Godongwana says it's now up to MPs to exercise their oversight and make sure the Budget is spent correctly. After a protracted process, South Africa is one step closer to finally passing a Budget after both Houses of Parliament approved the fiscal framework on Wednesday — but not without the usual party political jabs. Finance Minister Enoch Godongwana told the sitting, 'We have had a painful journey to arrive at this date, where the fiscal framework is being approved. It has been a painful journey. Definitely, from the [perspective of the National Treasury] we have drawn a number of lessons. 'But I suspect, also members of this House must draw a number of lessons as to how in practice we are going to manage the debates around the fiscal framework moving forward.' Godongwana said it was up to MPs to ensure the Budget was spent correctly. 'You can't fault this Budget — if it's not spent properly, that's your duty as members of Parliament to do your oversight,' he said. He was responding directly to a point made by National Coloured Congress MP Fadiel Adams about allocations within the Budget and how they could be spent. 'That should be the concern of this moment,' said Godongwana, who, since February, had attempted to pass a Budget. On Wednesday, 268 MPs voted in favour of the fiscal framework, while 88 were against it and two abstained. The ANC and the DA voted in favour of it. The MK party and the EFF voted against it, while Build One South Africa (Bosa) abstained from voting. Bosa's deputy leader, MP Nobuntu Hlazo-Webster, said the party had abstained because it was 'not a Budget that we can support. 'It's a Budget that is still not a good Budget in any way. It is still a Budget that ultimately punishes South Africans for the sins of the ANC,' she said. 'We absolutely want to see more catalysts for economic growth in the Budget… We gave alternatives — we proposed alternatives — that could look different for income generation for the state versus actually burdening South Africans further.' Hlazo-Webster said the National Treasury had not considered any of Bosa's proposals on income generation in the Budget. 'Ultimately, what this means is that the ANC's not listening to the people,' she said. 'This is still a very tax-heavy Budget, it's a stagnant budget. It's a Budget that doesn't speak to how [to] grow South Africa's economy. 'Shared vision of cooperation' The fiscal framework is a key step in the budgeting process; it establishes economic policy and revenue projections and sets the overall limits to government spending. This report must be adopted within 16 days from when Godongwana tables the Budget. The next phase in the budgeting process is the passing of various Bills, including the consideration and adoption of the Division of Revenue Bill and the Appropriation Bill. The ANC and the DA found common ground in Parliament's Standing Committee on Finance last week, both voting for the committee to adopt the framework report, Daily Maverick reported. Only the EFF and MK party rejected the report. When asked whether the ANC and DA — South Africa's two biggest parties — had now found each other after their previous public disagreements over the Budget, DA spokesperson Karabo Khakhau said: 'We've always maintained if we're agreeing on something and we're getting along and there is a shared vision of cooperation, then it would be easy for us to be able to pass through hurdles like the one of the fiscal framework now. 'The point of contention in the past that we've had, we've been able to deal with, so that's why there's a more open approach towards engagements, and that's what we've always wanted.' Khakhau said the party had wanted to see that issues of waste expenditure, ghost employees and infrastructure investment were being addressed. 'At the heart of why the DA is in the GNU is to make sure that we're able to grow the economy to alleviate poverty and make sure that people have jobs,' she said. Politics across the aisle On Wednesday, politics did not stop as the framework was passed, and the National Assembly Speaker, Thoko Didiza, had to call several MPs and political parties to order during the discussion. A loud cheer of 'weekend special' was heard from the ANC caucus when MK party spokesperson on finance, Des van Rooyen, spoke — in reference to his weekend stint as finance minister. When the Patriotic Alliance's Ashley Sauls spoke in favour of the report, MK party and Economic Freedom Fighters MPs shouted 'Free Palestine' in reference to the party visiting Israel for a ' fact-finding ' mission amidst Israel's ongoing assault on Gaza. ActionSA's Alan Beesley said he was 'proud' of the role his party played in the VAT hike reversal. From the DA seats, one MP shouted: 'No deal this time around, Beesley'. The EFF also tried to claim victory for the reversal. DM

DJ Zinhle and GalxBoy's boss join Bathu on 'Walk Your Journey'
DJ Zinhle and GalxBoy's boss join Bathu on 'Walk Your Journey'

The Citizen

time5 hours ago

  • The Citizen

DJ Zinhle and GalxBoy's boss join Bathu on 'Walk Your Journey'

This year's edition of 'Walk Your Journey' series kicked off on Wednesday at the Market Theatre in Johannesburg. From left to right: Theo Baloyi, DJ Zinhle and Thatiso Dube during a 'Walk Your Journey' panel discussion at the Market Theatre, Johannesburg. Picture: Supplied In celebration of Youth Month, the Bathu Foundation has revived the Walk Your Journey series, partnering with renowned DJ and entrepreneur DJ Zinhle, alongside GalxBoy founder Thatiso Dube. This year, the Foundation is focusing on equipping young South Africans with tools for success in the evolving entrepreneurship landscape. The 2025 edition of the series kicked off on Wednesday at the Market Theatre in Johannesburg under the theme 'Navigating the New Age of Retail: Opportunities and Challenges in South Africa.' Bathu founder Theo Baloyi, along with DJ Zinhle and Thatiso, led discussions on business growth, innovation, and sustainability in today's competitive market. Theo said the idea behind the series is to fast-track entrepreneurial growth by sharing real-world lessons. 'We believe there is a lot of potential in South Africa, a lot of emerging entrepreneurs. And it cannot only be that every 10 or 15 years, there's a Bathu or GalxBoy era that goes beyond the 10-year mark. 'So, we want to share the knowledge of how we managed to build a sustainable business over a period of 10 years. A lot of people have potential, but they just lack tangible know-how,' he said. He also highlighted the importance of including emerging topics like artificial intelligence in the conversation. 'There might be someone sitting there thinking, 'Actually, I want to start this business, but I don't know how to go about it,' or they struggle with self-expression. There is a tool in AI that can help you express yourself better.' ALSO READ: SA's MeerKAT telescope joins forces with European VLBI Network Bathu Foundation aims to reach wider audience The series is scheduled to continue on 18 June at the Fusion Boutique Hotel in Polokwane and conclude on 25 June at the Playhouse Theatre in Durban. Each session includes panel discussions, Q&As, and networking opportunities. The inclusion of Thatiso and DJ Zinhle in the programme reflects the Foundation's focus on practical, relatable insights. Theo said that together with DJ Zinhle and Thatiso, they bring over 30 years of combined experience to the stage. 'It's our way of giving back because we know that from this, instead of waiting 10 years to see two or three brands emerge, collectively we can have five to ten brands that come out of this session.' NOW READ: Thandiswa Mazwai says she would've accepted invite to national dialogue had Ramaphosa sent it

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into the world of global news and events? Download our app today from your preferred app store and start exploring.
app-storeplay-store