The Automobile Association (AA) has called for the immediate scrapping of the Road Accident Fund levy and a R3-a-litre cut to the general fuel levy after petrol and diesel reached their highest prices in South African history.

Fuel prices jumped last week, pushing motorists to the limit. Early data from the Central Energy Fund now signals a further increase of up to R4.58 a litre for petrol in November.

The AA’s demands come as the Road Accident Fund published its annual report for the 2025/26 financial year, requesting an increase in the RAF levy from R2.25 to R3 per litre for both petrol and diesel.

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

RAF levy under fire

The RAF levy already increased by seven cents in April this year. Net RAF levy collections totalled R47.8 billion during the financial year, according to the fund’s annual report.

Ramagwede says the RAF remains under-capitalised with liabilities exceeding assets based on reduced fuel sales, but argues that increasing consumer costs is not the solution.

“This is actually when National Treasury steps in and softens the consumer blow through real levy relief, versus levy hikes as the way forward,” Ramagwede says.

The AA wants National Treasury to cut fuel taxes by a further R3 a litre before the November adjustment. The organisation says the government should fund this by cutting wasteful spending rather than borrowing.

Diesel doubles in a year

Diesel has doubled this year from R17 a litre in January to more than R34, making it the largest annual increase on record. Central Energy Fund data suggests wholesale diesel could rise by a further R2.56 to R2.91 a litre in November.

Petrol has increased by about a third since January. The November projection shows petrol could rise by R4.29 a litre for 93 octane and R4.58 a litre for 95 octane.

Illuminating paraffin faces a projected increase of R5 a litre in November.

The AA predicts the latest fuel increase will push consumer inflation above 5%, delaying interest rate relief for households servicing debt.

Low-income workers hit hardest

Ramagwede says low-income workers carry the heaviest burden, with some spending as much as 40% of their pay on transport to and from work.

“Taxi, bus and e-hailing operators pass fuel costs on through fares, and these passengers have nothing left to cut,” Ramagwede says.

The AA reminds Finance Minister Enoch Godongwana that about 25% of the current fuel price consists of taxes.

National Treasury implemented sliding-scale fuel levy relief earlier this year, cutting fuel levies by R3 a litre in April at a cost of about R17 billion. However, the AA says this short-term strategy lacked a longer-term vision for consumer relief.

Government urged to recover costs from waste

The AA challenges Godongwana’s statement that offsetting fuel relief would increase costs for taxpayers or government borrowing. The organisation argues the government should examine its wage bill and spending.

“Year after year, government has found billions for failing state companies. It can find the money to keep South Africa moving,” Ramagwede says.

The AA has also called on Dr Tshepo Mokoka, the newly appointed group CEO of the Central Energy Fund, to address the lack of fuel buffers after the CEF sold off strategic crude stocks in 2015 and left PetroSA’s Mossel Bay refinery largely idle since 2020.

The organisation wants the Department of Mineral and Petroleum Resources to conduct a public review of the basic fuel price formula, including why fuel refined in South Africa is priced as though it were imported.

The AA is also asking the CEF to produce a public plan within 90 days to rebuild the strategic fuel reserve and settle PetroSA’s future.

For employers, the AA recommends reviewing transport allowances and, where possible, allowing one remote working day a week to cut weekly transport bills by a fifth.

“It is telling that October is Transport Month. South Africans are marking it by paying more to move than they ever have,” Ramagwede says.

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