Government has the audacity to hike fuel taxes after petrol hits R30 per litre

The Automobile Association of South Africa (AA) has condemned the government’s proposals to impose additional costs on motorists only days after petrol and diesel surged past R30 per litre.

The latest official fuel price adjustments took effect on Wednesday, 7 October 2026. Petrol prices went up by R3.33 per litre, while diesel users were hit with a R3.58 per litre hike.

As a result, petrol is now selling for R30.25 per litre at inland rates, while the wholesale price of diesel is pegged at R33.29 per litre.

The AA noted that these hikes have raised fuel prices to the highest levels South Africans have ever paid.

It also highlighted early data from the Central Energy Fund (CEF), which indicates that an even larger R4.58 per litre petrol increase may be on the cards for November.

The same day that fuel prices were hiked, the Road Accident Fund (RAF) published its annual report for the 2025/26 financial year.

The report includes proposals to raise fuel taxes and impose new fees on motorists to generate additional revenue for the RAF, which already receives R50 billion per year from the Road Accident Fund Levy.

“Adding insult to injury is the Road Accident Fund, which has the audacity to include a request to increase the RAF Levy for both petrol and diesel locally,” said the AA.

The RAF Levy is one of the two main taxes placed on every litre of petrol and diesel sold in South Africa, alongside the General Fuel Levy.

It currently adds R2.25 per litre to the price of fuel; however, the RAF argues that the levy has not been adjusted for inflation and that it is losing revenue as a result.

The RAF proposed that the levy should be increased from R2.25 to R3.00 per litre, an increase of 33%.

“The RAF levy, as a component of the fuel price, stands currently at R2.25 per litre post an already audacious increase of seven cents earlier this year at the start of April,” said the AA.

“Calling for R3 per litre is what the AA terms as consumer tone-deafness, ignoring completely an embattled consumer facing rising inflationary pressure off the back of interest rates, fuel costs and basics like groceries and school fees increasing almost monthly.”

The AA argued that the government should be doing the exact opposite, looking for ways to reduce fuel taxes to soften the blow motorists face at the pump, starting with the RAF Levy.

“The AA as a matter of urgency calls for the opposite. We remind government that it is the very taxpayer being stifled that pays its salaries, and as a consumer body here for almost a century the AA’s call is rigid: abolish the RAF levy immediately, find more appropriate ways to solve for the RAF’s mandate and allow the embattled consumer to continue contributing meaningfully to the economy.”

The RAF, which exists to compensate victims of vehicle-related accidents in South Africa, is technically insolvent after years of severe mismanagement.

Its former CEO, Collins Letsoalo, faced criminal charges for failing to respond to a parliamentary summons to appear before the committee for an inquiry into the entity’s financial crisis.

His replacement, current National Student Financial Aid Scheme (NSFAS) Acting CEO Waseem Carrim, will officially take over as CEO of the RAF on 1 November 2026.

“For the new RAF CEO, Waseem Carrim, appointed by cabinet just a few weeks ago, to even be considering this path is beyond concerning,” said Bobby Ramagwede, CEO of the Automobile Association.  

“We have read with concern comments intimating that RAF remains under-capitalised, with liabilities exceeding assets based on reduced fuel sales. Gouging the consumer is not the answer, especially considering that net RAF levy collections totaled R47.8 billion during the quoted financial year. 

Ramagwede said that this is when the National Treasury is supposed to step in and assist consumers through levy relief.

“The AA acknowledges the short-term General Fuel Levy relief that, on a sliding scale was implemented earlier in the year when National Treasury cut fuel levies by R3 a litre in April, at a cost of approximately R17 billion,” he said.

“We warned at the time, though, that this strategy needed to have a longer-term consumer vision; today, we are digesting the lack of Treasury’s foresight for the longer-term relief position the AA called for.”

The association also challenged Finance Minister Enoch Godongwana’s statement that offsetting fuel relief today would sway the cost to taxpayers or government borrowing.

“We believe that as a broader fiscus the costs related to the government wage bill and spending could be the start of an honest look in the mirror, through the lens of the embattled tax-paying consumer,” it said.

Ramagwede argued that the process of fixing the financial crises at South Africa’s state-owned entities must start with addressing wasteful expenditure, not raising taxes.

“Recover it from waste. Year after year, government has found billions for failing state companies. It can find the money to keep South Africa moving,” he stated.

“We maintain that government can afford to cut the general fuel levy, at midnight today, by R3 a litre, which would materially reduce the inflationary impact of fuel price changes – especially when you factor in that an enormous 25 per cent of your fuel price right now is taxes.”

He added that the fuel prices will also have an effect on interest rates, putting even more pressure on households.

“The AA further reminds Godongwana that diesel alone has doubled this year, from R17 a litre in January to more than R34, with early Central Energy Fund data painting the grim possibility of wholesale diesel rising by a further R2.56 to R2.91 a litre in November.

“This is not inflation, this is extortion.”

The AA demanded that the National Treasury implement a R3 per litre cut to fuel taxes, such as the General Fuel Levy, before the November adjustments, and that it recoup the costs by recovering wasteful expenditure rather than borrowing.

It also demanded that the Department of Mineral and Petroleum Resources conduct a public review of the basic fuel price formula, including an explanation of why fuel refined in South Africa is priced as though it were imported.

It also suggested that employers review transport allowances and allow one day of remote work per week to reduce travel costs for workers.