AA Calls for Fuel Levy Removal and Public Review of Fuel Pricing Formula
The Automobile Association (AA) of South Africa has welcomed Finance Minister Enoch Godongwana’s proposal to phase out fuel levies, calling on government to go further reviewing the basic fuel price formula through a transparent public process.
The call comes amid growing pressure on motorists and businesses facing high fuel costs. According to the AA, the general fuel levy, Road Accident Fund (RAF) levy and other duties add R6.58 to every litre of petrol. At October’s inland price of R30.25 per litre for 95 unleaded petrol, these charges account for more than a fifth of the pump price.
AA CEO Bob Ramagwede described the minister’s comments as a long-overdue step, noting that fuel taxes affect commuters, households and businesses alike.
Temporary Fuel Relief Offers Limited Certainty
Government has announced another round of temporary fuel levy relief, following similar measures introduced earlier in 2026.
From 4 November to 1 December, the general fuel levy will be reduced R1.50 per litre for petrol and R3.00 per litre for diesel. From 2 December until 5 January 2027, the reductions will decrease to R1 per litre for petrol and R1.50 per litre for diesel.
The AA has raised concerns that temporary reductions provide limited long-term certainty for households and businesses, making it difficult to plan for fuel expenses.
Calls for Transparency in Fuel Pricing
Beyond the removal of fuel levies, the AA is calling for a public review of the basic fuel price formula, which reflects the cost of purchasing fuel on international markets and transporting it to South Africa.
The formula is determined the Department of Mineral and Petroleum Resources.
Ramagwede believes there may be opportunities to improve efficiencies within the pricing structure and argues that a transparent review would help identify potential savings for consumers.
The AA also maintains that government should examine how public funds are spent and allocated when considering alternatives to the approximately R80 billion generated annually the general fuel levy.
Rethinking Road Accident Fund Financing
The AA has also called for a fundamental change to the Road Accident Fund’s financing model.
While the RAF levy currently funds compensation for people injured in road accidents and the families of those killed, the association argues that greater emphasis should be placed on preventing crashes through improved road user behaviour, better road infrastructure and stronger vehicle safety standards.
The AA proposes replacing the RAF levy with compulsory third-party motor insurance, a model it says could provide an alternative approach to compensating road accident victims.
The AA’s Recommendations
The association is urging government to:
– Remove the general fuel levy and RAF levy.
– Conduct a transparent public review of the basic fuel price formula.
– Address public spending and budget allocation when considering the loss of fuel levy revenue.
– Improve road safety through better driver behaviour, road maintenance and vehicle safety.
– Replace the RAF levy with compulsory third-party motor insurance.
Ramagwede emphasised that fuel pricing decisions have a direct impact on ordinary South Africans, arguing that reforms should focus on ensuring motorists are not burdened with unnecessary costs.
The AA believes a combination of transparent fuel pricing, improved public spending and effective road safety measures could help ease the financial pressure on motorists while addressing the underlying costs associated with road accidents.
