OPEN LETTER TO THE MINISTRY OF FINANCE, FUEL LEVIES MUST FALL!

The Automobile Association of South Africa (AA) condemns the fuel price increase that took effect on 7 October, which pushed petrol and diesel to the highest prices South Africans have ever paid. Early data from the Central Energy Fund (CEF) signals a further rise of up to R4.58 a litre for petrol in November.

Adding insult to injury is the Road Accident Fund (RAF), publishing its annual report for the 2025/26 financial year, which has the audacity to include a request to increase the RAF levy for both petrol and diesel locally.

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. 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 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.

“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. 

“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. 

“This is actually when National Treasury steps in and softens the consumer blow through real levy relief, versus levy hikes as the way forward. 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. 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 AA also challenges Finance Minister Enoch Godongwana when he says 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. 

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

Add this to predictions that the latest fuel increase will push consumer inflation above 5 per cent, and you’re left with a scenario which delays any form of interest rate relief for every household servicing debt. 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.

“Low-income workers carry the heaviest load. Some already spend as much as 40 per cent of their pay getting to and from work. Taxi, bus and e-hailing operators pass fuel costs on through fares, and these passengers have nothing left to cut,” mentions Ramagwede.

The AA also calls on Dr Tshepo Mokoka, the newly appointed Group CEO of CEF, who now leads a group that sold off strategic crude stocks in 2015 and has left PetroSA’s Mossel Bay refinery largely idle since 2020, to address this lack of fuel buffer which leaves our fuel-economy exposed to every pothole. This could be another lever that buffers the storms taking place on forecourts across SA.

“We remind our Ministers with government-paid fuel cards, that mobility is not transport. It is the freedom to change your circumstances. It is how you get to work, how you look for work and how your child gets to school. Every rand added to a litre of fuel comes out of that freedom,” mentions Ramagwede.

What the AA is asking for:

• National Treasury: a further R3-a-litre cut to fuel taxes such as the general fuel levy before the November adjustment, paid for by cutting wasteful spending rather than borrowing.
• The Department of Mineral and Petroleum Resources: a public review of the basic fuel price formula, including why fuel refined in South Africa is priced as though it were imported.
• The CEF: a public plan, within 90 days, to rebuild the strategic fuel reserve and settle PetroSA’s future.
• Employers: a review of transport allowances now and, where the work allows, one remote working day a week. For a five-day commuter, that cuts the weekly transport bill by a fifth.

“In closing, it is telling that October is Transport Month. South Africans are marking it by paying more to move than they ever have. This is not an AA request, it is rather an instruction to those employed to run this country. The consumer pays your salary and the consumer is the one staring firmly today at the bread line, as the elected body you need to provide the relief to those that keep you in your seat, or step aside and let those that will, do”.

Note to editors

The numbers

Sources: Investec chief economist Annabel Bishop; Central Energy Fund early data. November figures are projections and are recalculated daily.