The Supreme Court of Appeal (SCA) has set aside the South African National Roads Agency’s (SANRAL’s) attempt to increase its access levies for service stations located next to its national roads.
Since 1998, SANRAL has levied a 0.5% commission on the gross sales of all petroleum products sold at forecourts directly next to its roads.
It also receives a 1% commission on the gross sale of other products sold at these locations.
This applies to petrol stations on all of South Africa’s major roads, including main routes like the N1, N2, and N7, as well as other national roads where SANRAL is the registered servitude holder.
SANRAL attempted to increase these access levies, which was recently rejected by the SCA.
In a court ruling handed down on 12 January 2025, the SCA found that SANRAL’s unilateral implementation of a 2021 levy policy was unlawful and of no force and effect.
A legal dispute over the revised levies was launched by a trust comprising Casper Kasselman, Gertruide Kasselman, BDV Administration of States, and Loxodonta.
The trust wished to construct and operate a fuel station with rest facilities next to the N12 between Klerksdorp and Wolmaransstad, and had met all of the requirements by 2020.
However, SANRAL sent the trust a draft agreement in January 2021 with a new levy of 2.5% on gross petroleum sales, and a 6% levy on all other products.
The roads agency claimed that the increase was based on a new fee structure adopted by its board and set out in its 2021 policy guidelines.
In April 2021, SANRAL claimed that the increases were necessary, given that the previous percentages were established in 1998.
The Pretoria High Court ruled in SANRAL’s favour, reasoning that the terms of the contract, and in particular the levy percentages, were negotiated in a manner comparable to that of a commercial contract.
It concluded that the negotiations had no direct external effect on the public and that SANRAL’s actions were rational.
The Supreme Court of Appeal says otherwise
The SCA disagreed with the lower court’s findings, questioning whether SANRAL’s new policy and its retroactive application of the increased percentages could be reviewed under the Promotion of Administrative Justice Act (PAJA) or the principle of legality.
The court found that the boards of state-owned entities (SOEs) like SANRAL must be held accountable to the public and that their decisions should be subject to review.
It also said that it was common cause that SANRAL did not comply with sections of PAJA when it failed to follow a public participation process to implement the new levies.
The Fuels Industry Association of South Africa (FIASA) welcomed the ruling, claiming that it marked a significant affirmation of lawful, transparent, fair, and accountable decision making.
It added that the ruling will have far-reaching implications for consumers and petrol stations.
“The judgment goes beyond a narrow legal finding and speaks directly to the operational and economic realities facing fuel retailers within a highly regulated and tightly margined pricing environment,” it said.
FIASA said the higher levies would have posed a serious risk to employment, business sustainability, and the continued availability of forecourts in many locations.
“The SCA’s ruling now restores regulatory certainty and economic stability by implying that the 2016 access levy framework remains the only lawful policy currently in place,” the association said.
“It also sends a clear message that any future attempt to revise access levies must follow a constitutional, lawful, transparent and consultative process.”
Electric vehicle owners are also affected by the ruling, as charging stations located along SANRAL roads could be classified as “other products” subject to the higher levy.
Zero Carbon Charge, a company specialising in off-grid EV charging stations, revealed that SANRAL has attempted to impose the same levies on its operations in the past.
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