Transport Minister Barbara Creecy has confirmed she will not apply to the National Treasury to increase the Road Accident Fund levy while she remains in office, citing severe financial pressure on South African motorists. The decision arrives as the technically insolvent entity attempts to balance its finances through structural overhauls and alternative funding models.
The Bottom Line
- Levy Freeze Maintained: Minister Creecy has definitively blocked the Road Accident Fund’s proposal to push the fuel levy up to R3.00 per litre.
- Systemic Overhaul Required: The Department of Transport is pivoting toward administrative restructuring and legislative reforms rather than relying on motorist bailouts.
- Alternative Revenue Streams: Government is investigating mandatory vehicle-linked fees and foreign-registered motor vehicle levies to capture missing transport revenue without inflating fuel pump prices.
Why the Transport Minister Rejected the R3.00 Levy Proposal
The Road Accident Fund initially floated the proposal to hike the fuel tax to R3.00 per litre within its 2025/26 annual report. The fund argued that static collections and depressed fuel sales volumes had eroded its real income. However, management maintained that this adjustment proved insufficient to sustain an unlimited claims trajectory.
Minister Creecy drew a firm line against further pump tax escalations during an interview with ENCA. “As long as I am in this job, we will not apply to National Treasury for an increase in the fuel levy,” Creecy stated. She added that consumers already face unsustainable cost-of-living pressures and that the core priority must target internal operational waste.
| Fuel Levy Metric | Previous Rate (2021–2025) | Current Rate (2026/27) | Proposed RAF Target |
|---|---|---|---|
| RAF Tax Component | R2.18 / litre | R2.25 / litre | R3.00 / litre |
| Treasury Status | Frozen | Increased by 7c | Rejected by Minister |
Dismantling Mismanagement and High Legal Expenditures
The decision to block the fuel tax hike coincides with mounting scrutiny over the fund’s governance record. The entity has spent R12.8 million on legal costs for seven disciplinary hearings, while additional funds have been spent on salaries for suspended executives. The institution currently staggers under unpaid claims exceeding R21 billion.
Addressing the administrative crisis, Minister Creecy noted that the previous board was disbanded and an interim board installed. Creecy recently secured cabinet concurrence to appoint a new CEO. The Department of Transport aims to overhaul the Road Accident Fund Bill to establish a defined schedule of benefits and introduce a no-fault system. This structural shift is designed to curb the massive legal expenditures associated with adversarial court claims.
Shifting the Funding Burden to Vehicle Registrations
Although motorists have secured temporary relief at the fuel pump, alternative revenue collection mechanisms are under active evaluation. Creecy confirmed that the government is investigating a separate mandatory fee attached to motor vehicle registrations and licence disc renewals. This framework specifically aims to capture revenue from all road users, including the rising adoption of electric and hybrid electric vehicles.
Additionally, the Department of Transport is looking at implementing levies on all foreign-registered motor vehicles entering South Africa. These alternative collection strategies seek to stabilize the fund without placing additional inflationary burdens on regular daily commuters.
Disclaimer: The information provided in this article is for educational and informational purposes only and does not constitute financial advice.
