The Automobile Association (AA) has requested that the Treasury reduce fuel taxes by R3 per litre to alleviate financial burdens on households, businesses, and public transport users, given early indications of a potential petrol price hike of up to R4.58 in November.
In an official letter addressed to the Ministry of Finance, the AA strongly criticized the fuel price increases implemented on October 7th, noting that these hikes propelled both petrol and diesel prices to their highest recorded levels.
Furthermore, the organization alerted stakeholders that preliminary data from the Central Energy Fund (CEF) suggested that petrol prices might rise by as much as R4.58 per litre throughout November.
The AA's appeal surfaces amidst growing worries regarding the financial standing of the Road Accident Fund (RAF), particularly after its annual report for the 2025/26 fiscal year reportedly contained a proposal to raise the RAF levy on petrol and diesel.
Currently, the levy is set at R2.25 per litre, having seen a seven-cent increment in April. The AA cautioned that a suggested escalation to R3 per litre would impose additional hardship on consumers already grappling with escalating living expenses.
Bobby Ramagwede, the chief executive of the AA, advocated for the government to opt for a decrease in fuel levies instead of implementing further increases.
Ramagwede stated, “For the new RAF CEO, Waseem Carrim, appointed by Cabinet just a few weeks ago, to even be considering this path is beyond concerning.”
He expressed doubt about raising the levy while consumers faced higher fuel costs, inflationary pressures, increased interest rates, and rising expenditures for necessities like groceries and school fees.
He added, “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 totalled R47.8 billion during the quoted financial year.”
The AA recognized that the National Treasury had previously provided temporary fuel levy relief in April, which involved cutting levies by R3 per litre at an approximate cost of R17 billion. However, the association contended that this relief ought to have been integrated into a comprehensive, long-term strategy designed to shield consumers from volatile fuel prices.
The organization also contested the stance taken by Finance Minister Enoch Godongwana, who suggested that providing more fuel price relief could intensify pressure on taxpayers or necessitate greater government borrowing.
Ramagwede countered, “Recover it from waste.” He continued, “Year after year, the government has found billions for failing state companies. It can find the money to keep South Africa moving. We maintain that the 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.”
The AA issued a warning that further increases in fuel prices could push consumer inflation past the 5% threshold, potentially postponing any interest rate relief for individuals managing debt.
The AA also pointed out the significant surge in diesel prices, noting that diesel climbed from roughly R17 per litre in January to over R34, with initial CEF data suggesting a possible further wholesale increase ranging between R2.56 and R2.91 per litre in November.
Ramagwede emphasized that low-income workers are disproportionately affected by rising transportation expenses.
He observed, “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.”
Additionally, the AA called upon the newly appointed CEF group chief executive, Dr Tshepo Mokoka, to address concerns surrounding the nation's strategic fuel reserves and the future trajectory of PetroSA's Mossel Bay refinery, which the AA noted has been largely inactive since 2020.
The organization argued that restoring the country's fuel reserves could serve as a protective measure against international supply interruptions and fluctuations in fuel costs.
Ramagwede asserted, “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.”
The AA detailed several actions it expects the government and employers to consider. It specifically asked the National Treasury to enact another R3-per-litre reduction in fuel taxes prior to the November price adjustment, funding this through cuts to wasteful spending rather than increased borrowing.
The association also urged the Department of Mineral and Petroleum Resources to initiate a public review of the fundamental fuel price calculation formula, including the rationale behind pricing locally refined fuel as if it were imported.
Moreover, the AA demanded that the CEF publish a plan within 90 days detailing how it intends to rebuild the strategic fuel reserve and define PetroSA's future role.
Employers were also encouraged to reassess transport allowances and explore the possibility of allowing one remote workday per week whenever operations permit, which the AA suggested could lessen the weekly commuting expenses for staff who typically commute five days a week.
As October is designated Transport Month, the AA commented that the escalating cost of fuel has diminished the affordability of movement for South Africans.
Concluding his remarks, Ramagwede stated, “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.”