How Much Tax is in Your Petrol Tank?

This is a really useful graphic representation of tax in your fuel tank.

The bottom line, according to this representation, is that the government takes 27.9% by value of the fuel you put in your tank, the suppliers 53.1% and the retailers and distributors 19%.

HOWEVER – that 53.1% includes a state levy, that no one really knows the value of, at least those who know are not sharing the secret.  So, this is what we think is happening 

                              Given case            Best case            Worse case

Landed cost               53.1%                    38%                        28%

Retail & Distr.             19%                       19%                       19% 

Taxes*                         27.9%                    43%                       53%

*Includes State Levy      ?                          15%                       25%   

The worse case shows what amounts to a nearly 100% state levy on landed costs or 25% of the cost at the pumps.

Then, to add insult to injury, the state adds a Fuel Levy, and a Road Accident Fund Levy and Custom and Excise Duties, that is what makes up the 27.9% taxes, which, when adjusted by the worse case state levy, could amount to 53% of the cost at the pumps.

To add further insult they, the state, intend that E-Tolls be mandatory for all users of the national freeway system.  We have written on e-tolling here, for example, but what interests us here and now is another bit of information contained in the graphic representation, that of the percentage of the average daily wage spent on a litre of petrol.  This figure is a whopping 6.6%.  So, if you are an average road user, commuting say 10 kilometres a day at 10L/100 km, you will consume 1 litre or 6.6% of your average daily wage every day (to use the article’s example 6.6% of R203.00 = R13.40).

E-tolls cost for a similar trip, at say 30c/km, is R3:00.  

  • Add the two and you reach R16.40 or R1.64 per kilometre, about 8% of your average daily income. 
  • If the commute is a round trip of 10km/leg, that equals R33 per day or 16% of your average daily income.  
  • If you reside somewhere in Johannesburg and need to commute to Pretoria, that could cost you more than say R1.64 X 140 = R230 per day, or more than the average daily income, and I think that is being conservative.

BUT a 60 L tank at 10L/100km or 10km/l equals some 600km per tank.  At 30c/km E-Toll that would be R180.00. Add to that the actual tax in the tank at 53% of 60L at R13.02R/L  = R414. you get as follows:

Tax content of 600km freeway commute on a 60 L tank of petrol = 

  • E-Toll            R180, 
  • Fuel Taxes    R414
  • Total Tax       R594

That is almost R1.00 per kilometer or 75% of the cost of 60L at the pump at R13.02/L or R781.20 (prices at today, 7th October 2013).  

This computation is at the newly declared e-toll rate of 30c per Kilometer (26/10/2013) probably intended to sweeten the pill with no guarantees as to how long the rate will remain at 30c.  The ANC and SANRAL are making much hay about the rate of 30c (they listened to the public, they say).  It was previously set at some 65c / K where the tax per tank was R804.00, so while the new rate seems generous by comparison to the old, it does not negate the generally held opinion that the state should not be tolling the roads at all as it amounts to a double taxation because petrol levies were intended to fund road construction and maintenance.  This is something neither government nor SANRAL want to hear.  

I can only think of a few phrases to adequately describe this phenomena.  One is Highway Robbery, the other is Piracy.  In the good old days, they hung highway robbers and pirates.  Today we can’t do that.  Instead we seem to give them the right to rob and pillage.  Something is definitely wrong.

A Direct Democracy Forum administration would replace all taxes, including but not limited to all fuel levies and taxes and all Toll charges (including E-Tolls) with a 1% levy on all the economic activity in the country (see TEAL). This would mean R3.67 TEAL instead of be R594 road tax.  

This would be a saving of R590.33  on a 60L tank of petrol at 30c / Km E-toll

(it was a saving of R800.33 at 65c / Km E-toll)

Think of what that would do to the cost of transportation, the cost of getting to work, the cost of goods on the shelves, the cost of food on the table, for everyone in South Africa.

This alone is something worth sharing with all of South Africa, something worth voting for in 2014, not to ignore all the other DDF policies that are also worth sharing and voting for.

Support the DDF.

The buck stops at the ballot box.