Fuel prices jump as VAT takes effect

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Cape Town – After an unwelcome increase in VAT, South Africans have also been hit with a big jump in fuel prices, effective from today.
Inland motorists will have to pay 72 cents more for 95 octane, while 93 octane is going up by 69 cents. In the coastal regions, 95 octane will go up by 62 cents and 93 octane will experience a 59 cents increase. Prices, however, will differ depending on the magisterial district zones due to the different transport increases.
Diesel will increase by 65 cents in Gauteng and 55 cents on the coast.
Last week, Minister of Energy Jeff Radebe announced the adjustment of fuel prices for April 2018 based on local and international factors.
According to the Department of Energy, some of the main reasons for the fuel price adjustments include the increase in Fuel and Road Accident Fund Levies, the contribution of the Rand/US Dollar exchange rate, and the increase in the prices crude oil.
“South Africa’s fuel prices are adjusted on a monthly basis, informed by international and local factors. International factors include the fact that South Africa imports both crude oil and finished products at a price set at the international level, including importation costs, e.g. shipping costs,” the Department of Energy said in a statement.
Regarding the increase in prices of crude oil and refined petroleum product, the department said this led to higher Basic Fuel Prices on all the petroleum products.
“The main contributing factors were the tightening of stock levels in the USA and the uncertainty over the future of Iranian supply due to fears that the US might re-impose sanctions on Iran,” the Department said.
Fuel prices are not the only figures to go up. On Sunday 1st April, South Africa will see its first VAT increase in 25 years from 14% to 15%. However, there are still nineteen food items which are VAT zero-rated, including brown bread, dried beans, lentils, rice, and fresh fruit and vegetables.
Together with the VAT increase, sugary drinks will also be taxed if they contain more than 4g of sugar per 100 ml – for every gram over the 4g limit, an extra 2.1c will be levied. This means a can of cooldrink which would have cost R10, will now be sold at 10.12c.

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