Hiking Fuel Levies No Solution

Fuel levies are, unfortunately, intended to target motorists’ pockets, but in most cases, the poor are affected the most.

The Organisation of the Petroleum Exporting Countries (Opec) is considering an oil cut of about 1,15 million barrels. As such, Namibians see themselves as being caught between the devil and the deep blue sea.

The introduction of toll gates is not economically viable.

The Road Fund Administration (RFA) has envisioned an increase in the fuel levy charged on every litre of fuel sold in the country to meet a N$4,3 billion funding gap for road rehabilitation, upgrades, and maintenance.

The administration says the current levy, at N$1,48 on every litre of fuel, is insufficient to meet its funding needs, and lags behind that charged by regional peers.

This would greatly inconvenience not only the motoring public, but also workers, as it would further increase the cost of transport for the already hard-hit Namibians.

If nothing changes, it would be a tragedy for lower-income households. In light of the current threat to the nation’s economy, this ruling, if left unchallenged, would not only destabilise the country, but also further stifle economic recovery.

Inequality is not only a threat to economic and social rights, it also impedes the advancement of all rights. The lower-income car users would be hit hardest by a fuel levy increase, as they do not have as much disposable income as higher-income car users.

Increasing the fuel levy has a negative impact on a socio-economically deprived society, as it is a regressive tax where everyone pays the same.

Furthermore, fuel levy increases would not only affect the prices of fuel consumed by households, but also the prices of other goods consumed, because of the impact on the fuel input of these goods.

Fuel pump prices has an effect on the cost of living, as fuel drives the prosperity of the economy for any nation and should therefore be readily available, and at affordable prices.

With the Russia-Ukraine conflict and Opec considering reducing production, this would negatively impact the price of crude oil globally, which has had a direct impact on fuel prices in Namibia.

The plan to increase fuel levies is not a solution. Additionally, the RFA has anticipated an increase in revenue from toll gates.

This would translate to between N$500 million to N$750 million per annum, just by tolling 23 sections of the roads network.

This does not make business sense and it is not economically viable.

This comes amid concerns from a cross-section of the public about the impact of rising fuel costs and other economic variables on our pockets.

Moreover, the RFA’ annual financial statements for the year ended 31 March 2022 show an increase in revenue to N$2,4 billion, of which RFA pocketed N$1,3 billion in revenue collected from fuel levies.

The directors are remunerated an amount of N$723 754,22 for the year under review. This represents roughly 0,03% of revenue.

Its employee cost increased from N$92 502 060 to N$96 019 204 in 2022. This means employee cost increased by 3,67%, while entertainment cost increased from N$609 027 to N$ 782 293 (+N$173 266) for the year under review.

This means employee cost per month amounts to N$8 million and entertainment to N$65 191,08. The RFA surplus for the year increased to N$172 943 404 from N$88,188,302 (+N$ 84 755 102).

The net cash from operating activities increased to N$637 798 182.

The state-owned enterprise’s total assets increased to N$1,9 billion from N$1,8 billion as at 31 March 2022 to deliver total equity of N$611 856 753 – from N$438 913 349 for the year under review.

The RFA is solvent and highly liquid. It is generating enough from us.

Furthermore, most motorists are low-income earners driving ‘Dankie Botswana’ vehicles, and this would be a tough ride for them as they would be forced to part with their few hard-earned dollars.

I believe it would be a good initiative after our economy has stabilised. The RFA is not helping us at all, but wants us to get even poorer.

We are taxed every month. Imagine to have to pay high fuel levies and toll gates.

It’s so aggravating to realise the RFA does not consider how these escalating fees would affect us and make us miserable – people have cars, mortgages, and school fees to pay.

It is indeed difficult to fathom how Namibia, with a shrivelling economy that saw many people retrenched, is a country where the few who are employed earn salaries below the poverty line, and where the majority survives in informal sectors.

It is easy for the rich to pay these fees. The same applies to government officials who use government cars and so on paid for by taxpayers. What about the poor?

What about the citizens already scraping by and barely making ends meet, paying more for diesel and food? I think it is better for the RFA to think hard before making decisions.

It would be in the interest of the RFA to look for alternative methods to strengthen the economic policies of the government and return Namibia to the good old days, instead of calling for high fuel levies and introducing toll gates.

There is no denying the fact that it is a means of generating funds that could be used to maintain those roads and equally raise the government’s revenue.

However, we should know that these times are extremely hard, and there is a limit to which people can be pushed to spend non-existent money.

Therefore, the plan to increase fuel levies and build toll gates is ill-timed and against the masses. Let the rich stop pushing the poor, because the poor are near the wall.

Hence, an increase in fuel levies and toll gates are generally imposed for the purpose of raising additional net revenue. Taxing people to death is never the right way to shore up our depleting earnings as a nation.

You can’t give what you don’t have. This is not the time for collecting high fuel levies and building tolls.

The economy is not doing well, and there is a limit to which people can be pushed to spend non-existent money. Therefore, the RFA should target foreign trucks and let the status quo for Namibian vehicles continue.

I do not support this proposal.

  • Josef Sheehama is a banking industry professional with 19 years of experience. He writes in his personal capacity.

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