During his latest National Budget Speech, Finance Minister Enoch Godongwana announced increases for South Africa’s three major fuel taxes.
The minister proposed adjustments to the General Fuel Levy (GFL), Carbon Fuel Levy, and Road Accident Fund (RAF) Levy, which will take effect for both petrol and diesel from 1 April.
According to the National Treasury, the proposed GFL will increase by less than inflation, and the RAF levy will be increased to match inflation.
The latter increase has drawn the ire of the Organisation Undoing Tax Abuse (Outa), which noted that the fund is in desperate need of structural reform.
Without this reform, the organisation said that motorists would shoulder the burden of covering the RAF’s increasing liabilities.
Outa noted that although the Budget avoided major tax shocks and offers measured relief to taxpayers and small businesses, it stops short of the decisive reform South Africa urgently needs.
The organisation’s CEO, Wayne Duvenage, also questioned the timing of the proposed tax relief.
“If fiscal space exists today, the question is why similar relief was not prioritised earlier when households and businesses were under equal pressure.”
He also noted that much of this relief is offset by increases in fuel levies, with the GFL rising by 9 cents per litre for petrol and 8 cents for diesel.
The carbon levy will also increase by 5 cents for petrol and 6 cents for diesel, while the RAF levy rises by 7 cents per litre for both, effectively increasing both petrol and diesel prices by 21 cents per litre.
“Fuel levies are often presented as technical adjustments, but they affect the entire supply chain, from food prices to transport costs,” said Duvenage.
Concerns over the Road Accident Fund
A recent probe into the RAF by the Standing Committee on Public Accounts (Scopa) uncovered several concerns within its structures.
The concerns include the fund’s decision to cancel its panel of attorneys, resulting in undefended cases totalling R15.7 billion, widespread fraud allegations involving legal firms, and the RAF’s widening financial gap.
Scopa estimated its liabilities to amount to nearly R100 billion, compared to its annual income of around R50 billion.
The committee also raised concerns about the fund suspending its employees with full pay for extended periods.
Former RAF CEO, Collins Letsoalo, was suspended from the state-owned entity after he refused to appear before an official parliamentary inquiry.
He was still paid R9.8 million in the 2025 financial year, which included a bonus of nearly R3 million.
It is as a result of these glaring issues that Outa has raised concerns over increasing contributions made to the RAF.
“The annual fuel levy for the RAF contributes over R45 bn per annum, which falls well below the long-term provisions for the fund at R387.4bn, and is expected to increase to R426.2bn by 2028/29,” said Duvenage.
“Increasing the levy by a further R1,5 bn per annum, without fixing the structural failures of the RAF, simply shifts the burden to motorists while liabilities continue to grow.”
“South Africans are paying more into a system that remains fundamentally broken.”
Despite the Scopa probe and Outa’s concerns, there is some optimism regarding the Road Accident Fund.
Chairperson of the Portfolio Committee on Transport, Donald Selamolela, said that the committee believes the RAF is on the road towards recovery.
“We are satisfied that indeed there is work happening to improve governance and stabilise the operation of the RAF,” he said.
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