New driving insurance scheme proposed for South Africa – which could knock R2.18 off the petrol price

The Democratic Alliance has proposed the introduction of a driving insurance scheme as a possible measure to reduce the country’s record-high petrol prices.

The scheme forms part of a series of proposals tabled by the party ahead of a discussion on the country’s petrol prices in parliament on Wednesday afternoon (15 June).

Several European countries have introduced compulsory insurance for individuals and businesses when driving, with the mandatory system raising funds to provide protection for accident victims. “Road users who can provide proof of comprehensive third-party insurance receive a tax rebate for the R2.18 per litre Road Accident Fund Levy when they submit their annual tax returns,” the DA said.

The party has also called for the scrapping of the general fuel levy and an amendment of the Petroleum Products Act to allow for the deregulation of the fuel sector.

“The South African public simply cannot afford further fuel hikes, the resultant price increases on other necessities will force them further into debt. Many families will have to decide whether to pay for transport to work of buy food. It doesn’t have to be this way, and government intervention in this regard can stop people from having to make this trade-off,” the DA said.

“Government must give the DA’s plan of cutting fuel taxes serious consideration, especially in light of predictions of further increases in July.”

Data collated by BusinessTech shows South Africa is facing another steep petrol price hike in July, with prices set to increase again by as much as R2/litre.

Mandatory insurance 

South Africa’s Fuel Retailers Association has also proposed scrapping the country’s Road Accident Fund (RAF) in favour of a mandatory insurance scheme. The proposal was one of several made to parliament by the group in March 2022.

The Fuel Retailers Association is an independent employers organisation that represents the country’s fuel service station owners.

It argues that government should totally scrap the existing Road Accident Fund in its current revenue structure and replace it with a mandatory motor insurance flat fee – not linked to the petrol pump price.

South Africa’s Road Accident Fund offers protections to road accident victims, however, the funds are primarily raised from a levy attached to the Basic Fuel Price. The RAF levy is currently set at R2.18/litre after the National Treasury opted not to increase it in the 2022 financial year.


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New driving insurance scheme proposed for South Africa – which could knock R2.18 off the petrol price