Transport will become more expensive and consumers will pay more after Finance Minister Enoch Godongwana on May 21 announced a 4% increase in the fuel levy, of 16c/ℓ for petrol and 15c/ℓ for diesel.

This will be directly felt by consumers, as transporters cannot absorb increases without detrimental effects on their bottom-line, impacting on their business sustainability, says industry organisation Road Freight Association (RFA) CEO Gavin Kelly.

“This is how Treasury is finding R4-billion towards the R75-billion shortfall from the previous iteration of the budget, but this underscores that Treasury would rather tax citizens than cut the wasteful expenditure that has brought the country to where it is,” he avers.

From June, the cost of logistics, of which 85% runs by road freight, will become more expensive. The consumer will pay more, transport through South Africa will become more expensive and global supply chains will re-evaluate their routes, he states.

“You and I will dig deeper into our pockets for goods and services and transport to work while the government funds salary and wage increases. This [fuel levy decision] is not a good decision, neither in the medium nor long term,” Kelly says.