STATEMENT ISSUED BY DR GERHARD KOORNHOF, MP
UDM SPOKESPERSON FOR FINANCE
announcement of a further rise in the price of petrol comes as a shock to
consumers and especially commuters. A hike of 8 cents a litre on top of
astronomical increases in the past 12 months will severely impact upon the
budget of ordinary citizens. Already we are being warned of another rise in
It is encouraging that the price of diesel is decreasing, but the simultaneous
increase in the price of petrol will almost certainly cancel out the positive
effects of that relief. Inflation is on the rise and the already exorbitant
price of fuel in South Africa is playing a major role in that. This translates
to higher costs for consumer products, the Reserve Bank will have no option but
to increase interest rates, and then the consumer carries the brunt again!
The effect of Apartheid, the Group Areas Act specifically, has forced the
majority of South Africans to commute long distances on a daily basis. The
direct social impact of yet another petrol price increase is enormous,
especially for poor people.
As much as we sympathise with Government regarding the effects of international
crude oil prices on local fuel prices, the UDM continues to believe that
Government is overtaxing citizens when it comes to fuel. In this respect
Government continues the legacy of an Apartheid tax. The propensity of
Government to continuously increase the price of especially petrol leaves the
impression that users of petrol are Government's first port of call when more
revenue needs to be generated for the state.
Fact of the matter is that we are paying an inordinate amount of tax on fuel,
ostensibly in return for certain services. The Road Accident Fund is not only
bankrupt, but each successive year it slips a little deeper into the abyss. Are
consumers of fuel expected to keep throwing money into this bottomless pit?
Another part of the tax on fuel is supposedly import duties, whilst a large
percentage of fuel is manufactured locally! Yet another form of tax on fuel is
used to subsidise Mossgas and Sasol. Mossgas is another bottomless pit
swallowing taxpayers money for little or no return, while Sasol is a successful
company privatised 2 decades ago, with profits that run into several billion
rands a year.
The taxes on petrol make up nearly half of the price a consumer pays at the
pump! In fact just the amount of tax we pay is more than the cost of buying
refined petrol in Singapore and shipping it here (including the cost of
transport, insurance, product lost to evaporation and import tax)!
Government should revisit the system of fuel taxation in its entirety. South
African consumers and commuters deserve better. Government is clinging to the
outdated and irrational fuel tax instituted by the former Apartheid government.
Government is constantly justifying change and transformation in the name of
eradicating the legacy of the past, yet this specific legacy is actively
enforced. Perhaps Government thinks that SA consumers and commuters are the
goose than lays the golden eggs, and hence the irrationality, or the Apartheid
pedigree, of fuel tax is of little consequence, and have the minimum financial
or social impact on ordinary citizens?
Dr Gerhard Koornhof, MP
UDM Spokesperson for Finance
03 June 2000