South African Motorists Might Get Some Relief As Government Considers Scrapping Major Fuel Levy
- The Department of Transport is weighing a plan to reduce or scrap the RAF fuel levy charged to motorists at the pump
- A hybrid funding model could introduce mandatory third-party vehicle insurance linked to annual licence renewals
- OUTA CEO Wayne Duvenage warned the shift could leave uninsured drivers on the road and does not address the real problem
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Source: Getty Images
South African motorists could soon pay less at the pump. The Department of Transport (DoT) is exploring a significant change to how the Road Accident Fund (RAF) raises money, with proposals that could see the current fuel levy slashed or removed entirely.
The RAF levy currently sits at R2.27 per litre and is added to the price of fuel every time a driver fills up. The DoT is now looking at replacing this with a broader hybrid funding model that spreads the financial load differently.
What the new model could look like
Under the proposed framework, the fuel levy would be reduced while new funding streams would be introduced. These include mandatory third-party vehicle insurance tied to licence renewals, and compulsory travel insurance for foreign nationals visiting South Africa, who currently draw from the state fund when involved in road accidents.
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According to reports, the Department is also pushing for the Road Accident Benefit Scheme (RABS) Bill, which would set fixed benefit schedules for accident victims and cap total payouts to control costs. Growing electric vehicle adoption is another factor, as EV drivers contribute nothing to the fuel levy but can still claim from the RAF.
OUTA pushes back on the plan
Wayne Duvenage, CEO of the Organisation Undoing Tax Abuse (OUTA), is not convinced the model shift is the right move. He argued that the fuel levy works precisely because it is efficient and self-collecting. Every time a motorist buys fuel, the contribution is made automatically, with minimal overhead.
His concern with mandatory annual insurance is practical. A lump-sum payment of around R1,500 per year, he warned, would push many drivers towards non-compliance, potentially leaving more uninsured vehicles on South African roads.
Duvenage also contended that the RAF's financial strain is not a revenue problem but a management one. He argued that addressing leadership failures, inefficient claims processing, and fraudulent legal claims could reduce the required levy by as much as R1.00 per litre on its own.
On the governance side, Deputy Transport Minister Mkhuleko Hlengwa confirmed that the Department intends to appoint a permanent RAF board before the end of 2026. The previous board was dissolved by Minister Barbara Creecy in July 2025 following governance concerns.
Source: Getty Images
More on the Road Accident Fund
- Briefly News recently reported on the government's proposed new vehicle fee to rescue the RAF, which sparked public anger.
- A podcast clip revealed that the biggest RAF payouts went to foreigners, leaving many South Africans furious.
- A Mpumalanga hairdresser also won a R2.67 million payout after losing two fingers in a crash.
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Source: Briefly News
