How I saved R700 in petrol tax a month

Switching to an electric vehicle (EV) reduced my monthly tax bill by around R729. This is because roughly half the price of every litre of fuel sold in South Africa is taxes.

For unleaded 95 petrol, the general fuel levy (GFL) is currently about R3.85. Every litre of diesel includes carries a R3.70 GFL. The Road Accident Fund (RAF) contributes a further R2.18 per litre.

From 1 April 2025, the carbon levy for petrol increased by 3 cents, reaching 14 cents for every litre of petrol and 17 cents per litre of diesel.

In total, these taxes add R6.17 and R6.05 to the petrol and diesel prices, respectively.

Adding customs and excise duties, the slate levy and petroleum products levy take the total contribution of taxes in the petrol and diesel prices to R9.58 and R9.27, respectively.

The GFL is the third biggest contributor to government’s tax income.

Because they are broad-based and relatively straightforward to administer, the GFL and RAF have been soft targets for tax hikes — at least up to 2021.

Increasing the fuel tax is less harmful to economic growth than bumping personal income or corporate taxes.

However, civil society organisations and automotive stakeholders started pointing out that the increase rates were reaching unacceptable levels and put pressure on government to limit these increases.

Between 2008 and that year, the GFL increased by 225%, and the RAF levy jumped an astonishing 425%. Over the same period, inflation rose by 160%.

The Basic Fuel Price, which is determined primarily by the international oil price and the dollar-to-rand exchange rate, only increased by 119%.

If not for the steep tax increases, fuel would have been more affordable in South Africa today than in 2008, relative to the value of a rand.

The only legal way to stop paying fuel taxes is to stop consuming petrol and diesel completely.

Unless you want to walk more or use a bicycle, you will have to get a car that does not use petrol or diesel — which excludes hybrids.

Fully electric cars only use electricity as an energy source, which means you can stop using fuel stations altogether.

I recently bought a demo GWM Ora 03 electric hatchback to replace our Kia Sonet and naturally, which is contributing R0 to fuel taxes.

We calculated precisely how much less were were paying in fuel taxes due to this transition.

The Sonet consumed around two tanks of petrol every month, which works out to 90 litres.

Multiplying that figure by the R9.58 in tax on every litre of fuel results in a total tax reduction of R862.20. It should be emphasised this value can vary slightly from month-to-month with changes in the slate levy.

Only considering the R6.17 of the GFL, RAF levy, and carbon levy, the tax reduction was still a substantial R555.30.

However, it would not be fair to use these figures without considering there is also a 15.5% VAT on electricity, which I needed to pay to recharge the Ora.

I drive roughly 1,440km in a month and the Ora consumes about 16.8kWh per 100 kilometres of travel.

The Ora consumed roughly 242kWh of electricity. On the Tshwane Block 2 tariff, the most expensive tariff applicable to our household, the 15.5% VAT contributes about 55 cents per kWh.

For the entire month, the maximum total VAT paid would have worked out to R133.10.

The table below summarises how much we contributed to taxes with our petrol-powered Sonet compared to the fully-electric Ora.

Fuel tax conundrum

The adoption of EVs and more fuel-efficient petrol cars like hybrids could become a major headache for National Treasury over the next few years.

The government already reported a decline in net fuel levy collections of 6.3% to R85.77 billion in the most recent financial year.

Sars has blamed the decline on several factors — including a reduced purchases of diesel for backup generators due to much less load-shedding during the period.

Increased adoption of energy vehicles could worsen the downturn

The typical South African motorist drives about 43km in a day or 15,695km in a year.

The International Energy Agency estimated the average consumption of fuel-powered cars in South Africa was 7.4 litres per 100km.

That means they consume about 2,731 litres of fuel every year, contributing nearly R26,163 in taxes.

An estimated 1,257 EVs were sold in South Africa in 2024. With the current taxes on fuel, just these cars would contribute R32.89 million less to the fiscus in a year.

There are another 1,895 EVs sold in previous years that could be costing about R49.59 million in tax this year.

While these numbers might be tiny compared to government’s total tax collection, it is important to consider that traditional hybrid and plug-in hybrid vehicles that will also drastically reduce fuel consumption are surging in popularity.