One petrol tax in South Africa won’t be increasing – For now

The Road Accident Fund (RAF) fuel levy, which currently adds R2.25 to every litre of petrol and diesel sold in South Africa, won’t increase to R3.00 per litre as long as Transport Minister Barbara Creecy is in charge.

The Minister confirmed this in a response to Parliamentary questions by MK MP Adil Nchabeleng, adding that she would not agree to an increase “at this time”.

This follows the fund’s proposal of a R0.75-per-litre, or 33%, increase in its latest annual report, the largest ever increase to the RAF levy.

According to Creecy, the RAF did not support any measures that amount to taxpayers bearing the burden of its institutional inefficiencies, and acknowledged the financial pressures facing road users.

“Accordingly, the position is that any consideration of future funding measures must be balanced against the interests of road users and taxpayers,” Creecy said.

The Minister said this would be done while ensuring ongoing efforts to improve governance at the RAF, strengthen consequence management, enhance operational efficiency, and restore long-term sustainability.

“As long as I’m in this job, we will not apply to the National Treasury for an increase in the fuel levy. What we have to do is sort out the mismanagement that has happened at the RAF for a long time,” she said.

The RAF explained that increasing the levy from R2.25 per litre to R3.00 per litre would support the fund at a time when fuel sales in South Africa are in decline.

“The RAF remains under-capitalised, with liabilities exceeding assets by R439.5 billion,” the fund said, adding that it would request the increase and capital support from Treasury.

This support would reverse the RAF’s fortunes, with the entity technically insolvent, thanks to its total liabilities amounting to R452.4 billion for the financial year ending 31 March 2026.

A majority of the liability consists of claims that have yet to be paid, but with total assets adding up to only R12.9 billion, the fund was technically insolvent.

No news on licence disc fee hikes

With the RAF “losing out” on funding due to dwindling fuel sales, the Minister proposed a new tax on licence disc renewals, with increased EV and hybrid sales adding to this equation.

That said, Creecy has gone quiet since first proposing the new tax, which was also briefly outlined in the RAF’s annual report for 2025/26; however, it did not specify an amount

It also did not mention whether the proposed tax would be a completely new tax, or would apply only to new energy vehicles (NEVs) that use public roads but don’t contribute to the RAF through fuel levies.

The Minister previously mentioned that her department was working on a plan to turn vehicle registrations and licence disc renewals into a revenue stream for the RAF.

She explained that increased EV and hybrid adoption would result in lower fuel sales and less revenue for the RAF, but the proposal could penalise motorists who drive internal combustion vehicles.

That is because if the proposed licence disc and renewal tax applied to all vehicles in South Africa, these motorists would effectively be taxed twice to support the RAF, simply to cover losses from EV sales.

CEO of the Automobile Association of South Africa, Bobby Ramagwede, said the proposal was laughable and did not hold water.

“EV adoption is very slow. If one were to compare the rate of EV adoption to the amount of money we’re haemorrhaging from the RAF, it’s abundantly clear that the issue is operational,” he said.

Ramagwede argued that there would be no cause for a new tax on vehicle licence discs if the RAF’s inefficiencies and operations were addressed.