What will replace e-tolls?

Transport Minister Fikile Mbalula says if e-tolls on the Gauteng Freeway Improvement Project (GFIP) are scrapped, it is likely they will be replaced by something else.

“I am sure you are hoping that we scrap [e-tolls],” Mbalula said last week during a briefing on the new smart card driving licence.

But he added: “For every scrap, there’s always another thing that comes up and all of that.

“But don’t say that I said e-tolls will be scrapped. Wait for me to come back with [Finance] Minister [Enoch] Godongwana,” he said.

This is a reference to an earlier statement by Mbalula, which he repeated on Friday, that “before or at the MTBPS [medium-term budget policy statement in October] we will make the big announcement about the e-tolls”.

Mbalula also referred to the cabinet lekgotla, which starts this week.

Alternative mechanism

Organisation Undoing Tax Abuse (Outa) CEO Wayne Duvenage said the organisation is looking forward “to the end of e-tolls”.

Duvenage said Mbalula’s comments suggesting something will replace e-tolls if they are scrapped means National Treasury “is going to find another mechanism [to raise funds]”.

“But as we have always said, the mechanism has already been in place and they have been financing it [e-tolls] through Treasury allocations for the last six years and from taxes collected from the fuel levy,” said Duvenage.

“Hopefully they don’t see a need to increase the fuel levy to do this,” he said.

Duvenage admitted Outa suggested 10 years ago that the government should finance the GFIP through a 10-cents-per-litre ring-fenced increase in the fuel levy.

“But they have already increased the fuel levy, so that horse has bolted and they have done it. If they want to do it again, it would be frowned upon by Outa.”

ALSO READ: Does Sanral’s new tender finally signal the end of e-tolls?

Outa has highlighted that the fuel levy has increased by more than R2.50 per litre since the Gauteng freeway upgrade began in 2008.

Duvenage stressed that e-tolls have failed since they were launched in 2013, which was a matter and outcome Outa had warned the government about since 2012.

“It is our view that October’s announcement will lead to the e-toll scheme’s cancellation and the gantries on the highways will be put to other use, such as improving road safety and crime prevention,” he said.

There have been reports that the GFIP e-toll gantries could be used to enforce speed restrictions on the highway.

Fuel prices down, fuel levy up?

Outa and the Automobile Association (AA) last month expressed concern that government may hijack the consumer benefits of expected reductions in fuel prices to increase the fuel levy and use these funds to pay for the repayment of the GFIP bonds.

AA spokesperson Layton Beard said the association would be unhappy if the government increased the fuel levy to pay for the GFIP.

Beard said the general fuel levy generates R90 billion to the fiscus annually and the AA supports the use of a portion of these funds to pay for the GFIP, but this is subject to the fuel levy not being increased and the government using the current funds being raised to pay for the GFIP.

Outa and the AA’s comments followed Mbalula’s admission in June this year that a decision was taken by the cabinet on e-tolls, which was taking the government in the direction of the fuel levy, but this plan was scrapped because of the then-sharp increases in oil and fuel prices.

Mbalula moved quickly to quell speculation about an increase in the fuel levy to fund the GFIP, stressing that “government has not made any pronouncements” about the future of e-tolls.

“We, therefore, appeal to all stakeholders to desist from rumour mongering that is intended to create anxiety among motorists,” he said.

Fuel price reduction

The Department of Mineral Resources and Energy (DMRE) on Monday announced that the price of both 93 and 95 unleaded and lead replacement petrol will decrease by R2.04 per litre effective from midnight on Tuesday.

This is the second consecutive month that the petrol price has been reduced, after steep increases after global oil prices soared following Russia’s invasion of Ukraine in February this year.

The petrol price decrease is happening despite the DMRE approving a 30.66-cents-per-litre increase in the slate levy to 83.68 cents per litre effective from 7 September.

ALSO READ: Automobile Association urges government to scrap e-tolls

Duvenage said at the weekend that Outa will not relent in applying pressure when it comes to protecting motorists from unnecessary costs and frustrating processes, such as the renewal of driving licence cards, e-toll decisions, the Administrative Adjudication of the Road Traffic Offences (Aarto) Act and a host of other inefficiencies that give rise to poor service delivery.

In a judgment handed down in January to an application lodged by Outa, the High Court in Pretoria declared the Aarto Act and Aarto Amendment Act, which provides for the introduction of the driving licence points demerit system, unconstitutional and invalid.

The Department of Transport has lodged an application to appeal this judgment.

This article originally appeared on Moneyweb and was republished with permission.
Read the original article here.

NOW READ: Mbalula shuts down speculation about possible fuel levy increase to fund e-tolls