Fuel price therapy – what should we do?
The exorbitant price of fuel is an unhappy reality of South African car ownership. But are there smarter ways in which the Government could tax road users and, which powertrain technology is most likely to underpin affordable new-energy vehicles?
When you refuel your vehicle, do you watch the digital display on the pump in disbelief? Or do you naively attempt to distract yourself from the fuel price by mindlessly scrolling on your smartphone?
The latest fuel price increases have seen the price of inland diesel rise to R25.22 per litre and unleaded 95 to R25.68 per litre. It’s expensive and unavoidable: whether you love driving on that Sunday morning breakfast run, or partake in the daily commute.
South African fuel prices have been contentious for many years. All countries’ governments levy a fuel tax, but South Africa’s petrol and diesel taxes are severe and their distributed reinvestment in the country’s driving infrastructure is negligible, at best, and unaccounted for, at worst.
Is there a better way of structuring the price of fuel? And, more importantly, where are viable powertrain options for drivers who want to retain on-road performance, but with a reduced fuel-spend burden?
The price of a full tank of fuel matters…
You can quote the latest cost per litre at the fuel pumps (“Heck, everything goes up constantly,” some may say), but when you start pricing tankfuls, the fuel price issue becomes a lot more relatable.
That’s because shrinking fuel tank sizes hide some of the fuel inflation expense. On popular South African passenger cars, such as the Volkswagen Polo, the hatchback’s relatively small tank capacity masks cost escalation. But even with a compact car like a Polo, fueling at R1 155.60 a tankful is painful.
Diesel-powered bakkies account for nearly all of the country’s new pick-up sales. When you calculate what it costs to fill a bakkie’s tank based on the October 2023 fuel price, the cost issue becomes more apparent because bakkie tank volumes have remained relatively unchanged throughout the decades.
Although most double cabs are used as family vehicles nowadays, bakkies are engineered to be utility vehicles. That means they need to have fuel tanks that are large enough to enable them to haul 1-tonne loads or tow 3.5-tonne trailers (if needs be), for reasonably long distances.
The Toyota Hilux is South Africa’s most popular vehicle and it features an 80-litre fuel tank, which now costs R2 017.22 to fill. That’s a lot of money if you need to fill up each week. Still, it could be worse…
Toyota’s popular Land Cruiser Prado is considered one of the best adventure and exploration vehicles that you can buy, and one of the reasons it is so prized by 4×4 enthusiasts is its fuel range. The Prado’s driving endurance is enabled by its 150-litre fuel capacity; its 87-litre main tank is supplemented by a 63-litre secondary tank. And to fill both for R3 783 is, in a word, expensive.
Fuel tax cannot be undone
At the time of writing, each litre of fuel you purchase carries a R3.95 general fuel levy, which Government is supposed to use for road maintenance and driving-related functions. It’s a proven model globally.
The thinking that underpins the tax is “the more fuel you use, the more road wear you will probably cause”, so the general fuel levy is a fair pay-as-you-go system. Or is it? That’s a technical question that becomes problematic when analysing the idea of comparative road wear caused by vehicles.
A twin-turbo V8 luxury car consumes a lot of fuel, but does it create a greater or lesser road wear impact load than a fully passengered taxi or 1-tonne bakkie with its loadbox filled to peak carrying capacity?
Fully loaded taxis and -bakkies aren’t light on fuel, their consumption figures are comparable with that of much lighter performance cars. Now, those 3 kinds of vehicles use the same amount of fuel to cover the same distance – and pay similar fuel taxes – but cars would inflict far less road wear than the others.
It begs the question: Isn’t it fairer to have road maintenance costs balanced by severely taxing vehicles on their operating mass, instead of mere pay-as-you fuel consumption?
The Road Accident Fund problem
Aside from the R3.95 per litre general fuel levy you pay, the Road Accident Fund (RAF) tax of R2.18 per litre is perhaps more problematic.
In principle, the RAF is a valid and worthy insurance policy for those who have suffered the trauma of a vehicle or road-network accident. But it is wildly dysfunctional. The RAF’s latest financials were released in September – and they’re startling. Collins Letsoalo, the CEO of the RAF, admitted that the organisation had a R8.43-billion deficit despite receiving R2.18 from every litre of fuel retailed in South Africa.
SA road users should indeed have a public liability resource, but the RAF needs to be transformed to prevent misuse. There is an argument that RAF claims benefits should be set within a reference table, much like medical aid co-payments for specific procedures. This would still benefit vulnerable accident victims, especially those with very little income and no private income protection or disability insurance.
Re-rating the RAF benefits to a fixed payment scale could limit the absolute benefit to upper-middle-class and wealthy accident victims. Those groups represent South Africans who can afford to have additional private accident liability insurance and income protection coverage. The RAF’s nearly unlimited liability payment structure has been too susceptible to exploitation and corruption…
There has been a response by the RAF, however, with the launch of its new customer relations management call centre in July. This digitised resource is supposed to empower claimants and prevent unscrupulous legal professionals from skimming payouts and misrepresenting process timelines.
Where are the plug-in hybrids?
When fuel costs surge, drivers want solutions and they’re often not what customers assume them to be.
Official fuel consumption figures are deeply disingenuous. A small turbocharged engine, which has become the configuration of choice to pass emission regulations (in mature car markets overseas), is often heavier on fuel in real-world South African conditions than a larger, naturally aspirated engine.
South African highway driving conditions vary between competitive and hostile. Owning a vehicle with adequate overtaking performance is not a function of driving ego on our highways, but a safety feature. And the best hybridisation of fuel efficiency and overtaking potency is a hybrid. It’s why the Corolla Cross has been such a success for Toyota. But South Africa is desperately short on hybrids, especially PHEVs.
Battery-electric vehicles aren’t the solution for most South Africans who want to use technology to mitigate escalating fuel prices. There just aren’t any remotely affordable BEVs in the local market – yet.
But are there plug-in hybrid electric vehicle (PHEV) solutions? Ford’s upcoming plug-in Ranger has significant potential, although it will require South Africans to reevaluate their biases towards diesel as the fuel of choice for bakkies and bakkies of with a PHEV configuration won’t be cheap.
No cheap turbodiesels or bargain PHEVs
What about those affordable hybrids? There are options. Renault’s E-Tech could be an excellent solution for South Africans who want a compact family car platform with the efficiency of plug-in hybridisation.
The Captur E-Tech (and its Arkana sibling) features 2 electric motors, 1 acting as a transmission shift point smoothing function. With a total system output of 118 kW and a claimed urban fuel consumption figure of under 5 L/100km, the Captur E-Tech makes a compelling case for small crossover PHEVs.
If you want something larger, Hyundai’s Tucson family car has a proven product legacy in Mzansi, and the PHEV version is good for 195 kW and is said to have an average urban consumption of 1.9 L/100km.
For South Africans in the entry-level vehicle market, there is little opportunity to trade laterally, in price, for superior technology. The turbodiesel-powered city car was once a true fuel-economy hero, but since the recent global disinvestment in diesel engines, small car owners are out of smart powertrain options.
A Polo-sized PHEV would be amazingly efficient, but brands haven’t invested in making that happen, which is a pity. And that makes the fuel price issues a problem without technology solutions. Unless you are wealthy enough to own a BEV or PHEV – in which case it doesn’t really matter that much, anyway.
Related content:
When big tyres do bad things to good bakkies
Can Land Rover thrive without the Land Rover brand?
Is LPG worth its near 40% fuel-cost saving?
How much will 9th-gen Hilux be like the Tacoma?
Would you buy a brand-new ‘old’ Toyota bakkie?
Is Isuzu’s 6-cylinder turbodiesel hiding in plain view?