The Automobile Association (AA) of South Africa has welcomed Finance Minister Enoch Godongwana’s call to phase out fuel levies. It has also asked government to go further and publicly review the formula that sets the basic fuel price.
In a recent interview on 702, Godongwana said the general fuel levy brings in R80 billion, and that “we’ve got to find a way of phasing it out”. He said the Road Accident Fund (RAF) also needs a new insurance model “so it doesn’t rely on the levy”.*
Together, the general fuel levy of R4.29, the 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. A motorist filling a 50-litre tank pays about R329 in levies. 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. “Fuel taxes land on everyone who moves: the commuter in a taxi, the business running a fleet, and the worker who pays to get to the job that pays for the journey.”
Relief that comes and goes is hard to plan around
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. The government will fund it by returning R10 billion transferred to the Central Energy Fund.* The first round, in April, was halved in June and withdrawn in July.*
For households, this round shrinks before the December holidays and runs out as many families drive home. For fleet owners, a levy that changes every few months makes fuel harder to budget for.
The basic fuel price needs the same scrutiny as the levies
The basic fuel price is the biggest single part of what motorists pay. It reflects what it would cost to buy fuel on international markets and ship it to South Africa. The Department of Mineral and Petroleum Resources, not Treasury, sets it through a formula.
“Government should remove the levies the minister has named, and review the basic fuel price formula in public,” said Ramagwede. “I still think there is room for efficiency at the basic fuel price level. A public review is how we find it.”
Godongwana has acknowledged that phasing out the general fuel levy would leave a gap of about R80 billion. “We must then determine how we are going to close that gap,” he said.*
“I have long held the view that the problem is not revenue collection. It is expense management and budget allocation,” said Ramagwede. “Our fiscus is porous. That needs to be fixed if we want interventions like this one to succeed.”
Fix the causes of crashes, then change who pays for them
The RAF levy funds compensation for people injured on the roads and the families of those killed. Godongwana said that removing it alone would bring “a major decrease in the price”.*
“We do not need a central fund to cater for road injuries. We need to deal with the root causes: poor road user behaviour, decaying infrastructure and questionable vehicles,” said Ramagwede. “Improve those, and the state carries less of the cost of compensating the people hurt in crashes.
“The funding model must change too. Most developed economies have made compulsory third-party insurance the answer to what the RAF is battling to get right.”
The AA is asking government to:
- Remove the general fuel levy and the RAF levy, as the minister has suggested.
- Review the basic fuel price formula in public.
- Treat the R80 billion gap as a question of how public money is spent and allocated, not only how it is raised.
- Tackle road user behaviour, road maintenance and vehicle safety, the causes of the crashes the RAF pays for.
- Replace the RAF levy with compulsory third-party motor insurance.
“Every levy on a litre of fuel is a choice somebody made, and the cost lands on the person who can least carry it,” said Ramagwede. “I am not asking government to be generous. I am asking it to be accurate about who is paying.”
Information marked with an asterisk (*) comes from the following reports, listed in order of appearance:
- MyBroadband, Jan Vermeulen, 26 October 2026, “Plan to scrap taxes on petrol and diesel in South Africa”, covering the minister’s 702 interview, the fuel levy breakdown, October fuel prices and this year’s levy relief: [link: https://mybroadband.co.za/news/government/674159-south-africans-could-be-paying-r296-25-less-per-tank-of-petrol.html ]
- National Treasury, 21 October 2026, Medium-Term Budget Policy Statement, on the temporary fuel levy relief and how it is funded: [link: https://www.gov.za/news/speeches/minister-enoch-godongwana-medium-term-budget-policy-statement-2026-21-oct-2026]
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