The South African government can cut the petrol price by R2.25 per litre with one decision

Calls are growing for the Road Accident Fund (RAF) to be dissolved amid rising fuel prices in South Africa, driven by the global oil crisis.

The prices of both diesel and petrol rose by around R3 on Wednesday, 7 October, bringing all fuel types in the country to record-high prices.

The price of diesel is now 30% higher than it was a year ago, while the price of petrol has increased by 18% over the same period.

This has contributed significantly to the rise in inflation, which reached 4.4% in August. This was up from 4.3% the month before.

Member of Parliament Chris Hunsinger said that the only way for South Africa to reduce fuel prices would be to reform and replace the RAF, and abolish the fuel levy that funds it.

The RAF levy is currently set at R2.25 per litre of fuel, following an increase of 7 cents per litre which came into effect from 1 April 2026.

The fund has now called for this levy to be raised to R3 per litre, which it says will alleviate its under-capitalisation issues amid declining fuel sales volumes.

The RAF recently revealed before Parliament that its backlog of outstanding claims had reached R450 billion, while its assets sit at R14.15 billion. This makes the fund technically insolvent.

“As its current annual income is R47 billion, it would take more than 10 years just to clear the backlog without granting any new claims or paying any operational expenses,” Hunsinger said.

“The RAF is bankrupt, and every person who goes to a fuel station is paying to keep this failing system afloat. This is making petrol and diesel far more expensive than they should be.”

According to the RAF, net fuel levies account for 99.4% of its total revenue, with declining sales in the wake of the Middle East conflict significantly impacting its turnover.

As such, the R47.8 billion revenue recorded by the RAF in 2025/26 was 4.6% lower than the R50.1 billion it recorded in 2024/25, despite the levy being 7 cents per litre higher.