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The fuel price will ease 3c a litre as the Department of Energy drops its inland transport levy

by , 28 March 2014

Yesterday, the Department of Energy said that as of next month it's scrapping one of its fuel levies. The department introduced the inland transport levy in 2009 to compensate companies for bringing fuel inland from the coast. Let's take a closer look at what this means for motorists…

The Department of Energy will scrap the levy on 2 April

Robert Maake, director of fuel pricing mechanisms at the Department of Energy, said it will abolish “an inland fuel transport levy,” reports Fin24. This “costs motorists an extra 3c per litre”.

Mr Maake said the levy is currently payable of petrol and diesel, but will fall away on 2 April, adds Fin24.

The Department of Energy brought in the levy in 2009, says IOL. This happened when the “fuel pipeline between Johannesburg and Durban reached full capacity”.

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The purpose of the levy was to compensate “oil companies that used alternative routes,” adds IOL. For instance, oil companies that brought their fuel inland “via the road”.

A new fuel pipeline came online in 2012

Two years ago saw the completion of a “new multiproduct pipeline,” reports City Press. But the levy had to remain until the department cleared “a backlog of payment to oil companies”.

The multiproduct pipeline can “carry all grades of petrol, diesel and jet fuel,” notes All Africa.

With the abolishment of the levy, Mr Maake says the department will not only adjust “the basic fuel price,” reports All Africa. It will also “adjust the transport cost – both the pipeline transport cost and road transport cost”.

So a very slight drop in the price of fuel due to the abolishment of the levy. But the department still has to confirm if there will be any fuel hike next week.

The fuel price will ease 3c a litre as the Department of Energy drops its inland transport levy
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