- AA welcomes minister’s call to phase out fuel levies.
- Levies add R6.58 to every litre of petrol.
- General fuel levy brings in R80 billion.
- AA wants basic fuel price formula reviewed publicly.
- Temporary levy relief runs until 5 January 2027.
Finance Minister Enoch Godongwana said in a recent interview on 702 that the general fuel levy brings in R80 billion and that government has to find a way of phasing it out. The Automobile Association (AA) of South Africa has welcomed the call and asked government to go further by publicly reviewing the formula that sets the basic fuel price.
Together, the general fuel levy of R4.29, the Road Accident Fund (RAF) levy of R2.25 and two smaller duties add R6.58 to every litre of petrol. At October’s record inland price of R30.25 a litre for 95 unleaded, that is more than a fifth of the pump price. By the AA’s calculations, a motorist filling a 50-litre tank pays about R329 in levies, while a company running 100 petrol vehicles that each fill up once a week pays about R1.7 million a year. “This is a long overdue and welcome call,” said Bobby Ramagwede, CEO of the AA.
Temporary fuel levy relief until January
The minister’s comments come alongside a second round of temporary relief this year, announced in the Medium-Term Budget Policy Statement on 21 October. From 4 November, the general fuel levy falls by R1.50 per litre on petrol and R3.00 per litre on diesel until 1 December. After that, until 5 January 2027, the cut drops to R1 on petrol and R1.50 on diesel, funded by returning R10 billion transferred to the Central Energy Fund.
The first round, in April, was halved in June and withdrawn in July. In the association’s view, this latest round shrinks before the December holidays and runs out as many families drive home, while a levy that changes every few months makes fuel harder for fleet owners to budget for.
Basic fuel price formula under scrutiny
The basic fuel price is the biggest single part of what motorists pay. It reflects the cost of buying fuel on international markets and shipping it to South Africa, and is set through a formula by the Department of Mineral and Petroleum Resources rather than Treasury. Ramagwede believes there is still room for efficiency at that level and wants the formula reviewed in public.
Godongwana has acknowledged that phasing out the general fuel levy would leave a gap of about R80 billion. For Ramagwede, the problem lies in expense management and budget allocation rather than revenue collection.
Road Accident Fund levy and insurance
The RAF levy funds compensation for people injured on the roads and the families of those killed, and the minister said removing it alone would bring “a major decrease in the price”. The AA argues that poor road user behaviour, decaying infrastructure and questionable vehicles should be tackled first, and that the levy should be replaced with compulsory third-party motor insurance. “Most developed economies have made compulsory third-party insurance the answer to what the RAF is battling to get right,” said Ramagwede.
Consumers with a mobility-related issue that needs the AA’s mediation can email theaa@aasa.co.za.
Supplied by QuickPic (AA)
This story is based on aggregated news, press release(s) or other sources and was prepared with the help of AI tools, which can make mistakes. Prices, specifications, general information and availability may change, so confirm the details with the manufacturer, other news sources or a dealer.
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