AA: Steep fuel hike premature

Johannesburg - Government must match looming fuel hikes by meeting public expectations of service delivery by the transport department service, the Automobile Association (AA) of South Africa said on Wednesday.

"The additional 17.5c a litre contribution to the Road Accident Fund is perhaps premature," said AA spokesperson Gary Ronald in a statement.

The Association was responding to Finance Minister Trevor Manuel's budget speech which indicated that taxes on petrol and diesel would also rise by 40.5 and 41.5 cents a litre respectively.

Manuel said this was due to fuel levies increasing on April 1 by 23 cents a litre for petrol and by 24 cents a litre for diesel and added that the Road Accident Fund (RAF) levy would also be adjusted up by 17.5 cents.

Ronald said the hikes should be coupled with the public's expectation that the Department of Transport and its agencies would actively implement its Road Safety Strategy and to service claims against the RAF.

The Association called on government to ensure that the additional burden placed on the road user was spent in such a manner that the benefits of the tax would be obvious to contributors.

Ronald said it would have been more appropriate for the additional levy to be deferred until the Road Accident Fund was in a position to meet all requirements set out in the Road Accident Fund Amendments Act.

"The allocation of funding derived from the fuel levy to municipalities for infrastructure needs to be strictly controlled and transparent to the public", Ronald said.

"While understanding that the cost of fuel is a significant factor in not only the general economy of the country, it impacts directly on the affordability of mobility to the road user."

Any increase in the price of fuel through additional taxation should be seen as a last resort, he said.

- Sapa