Some good news for petrol prices in South Africa
Transport Minister Barbara Creecy has nixed a proposal by the Road Accident Fund (RAF) to hike the RAF Levy to R3.00 per litre.
Speaking to ENCA, the minister said that as long as she is in the job as head of the department, she will not apply to the National Treasury to increase the RAF fuel levy.
This follows a proposal in the RAF’s 2025/26 annual report, in which the fund said it would push for another hike in the tax in the coming year.
In the report, the fund noted that its current funding model has been affected by reduced fuel volumes and levies remaining static.
The National Treasury increased the RAF levy for the first time in five years in 2026, hiking the tax by 7 cents per litre to R2.25, from R2.18 before.
The levy had been frozen at R2.18 per litre since 2021/22.
“The RAF has not received an increase in the fuel levy over the past five years. During the same period, inflation continued to erode the Fund’s real income,” it said.
While the 7-cent-per-litre hike to the levy in 2026/27 was welcomed, the RAF said it was not enough.
Notably, even as the tax went up, collections were severely undercut by lower fuel sales volumes due to fuel price hikes driven by the war in the Middle East and other inflationary pressures.
This has put this historically insolvent fund under even more pressure to “fund an unlimited claims trajectory”.
To address this, the RAF’s management is proposing increasing the fuel levy to R3.00 per litre to help stabilise its solvency position.
It said that it has made a proposal to the National Treasury through the Medium Term Expenditure Framework for a stronger levy of “up to R3.00 per litre”, in addition to Treasury capital support.
Creecy said this is not happening.
“As long as I am in this job, we will not apply to National Treasury for an increase in the fuel levy,” she said.
“I think consumers are under enough pressure; what we have to do is sort out the mismanagement that has happened at the Road Accident Fund for a long time.”
The RAF needs to change, but drivers will still pay
Creecy said that the transport department has already taken steps to address the RAF’s management crisis, and more will still be done.
“We have to sort out the finances and management, so we stop wasting money, and we stop doing dramatic things…that grab headlines and generate a lot of heat.”
The minister added that the RAF laws and regulations also need to be changed to prevent the fund from wasting large sums of money on endless legal cases.
Creecy said that the RAF is funded by taxpayers and that it is “outrageous” to be tapped for “exorbitant amounts of money”.
While Creecy has nixed a hike in the RAF Levy, motorists will still face new taxes to fund the RAF from other sources.
This includes implementing the levy on all foreign-registered motor vehicles entering South Africa and attaching it to motor vehicle registration and/or licence renewals.
This is being investigated, confirmed previously by Creecy herself, specifically looking to cover the rise of electric and hybrid electric vehicles in South Africa.
Creecy confirmed in July that the government is working on a new funding model for the RAF, adding that there was merit in a separate mandatory RAF fee.
This would be tied to vehicle registrations and licence disc renewals, she said.
The Department of Transport argues that a new vehicle-linked transitional levy is needed to capture revenue from all road users.
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