Business Insider Edition

You are now paying 12% of every litre of petrol to the insolvent Road Accident Fund - its share has almost doubled in a decade

James de Villiers , Business Insider SA
 Jul 04, 2018, 09:21 AM

You are now paying almost R2 for every litre of petrol to the insolvent Road Accident Fund.  

For every R16 South Africans spend on a litre of petrol starting today, R1,93 goes to the ‘technically insolvent’ national Road Accident Fund (RAF). That is almost 12% of the petrol price - as recently as 2008, only 6% went to the RAF.  

The RAF levy on a litre of petrol increased from 45c in 2008, to R1,93 in June - a whopping 330% increase in ten years. 

The fund has struggled to pay road accident victims the past few years, and posted an R34,7 billion loss in 2017, compared to the R33,3 billion it received mainly from tax on fuel. 

The RAF, whose board was dissolved last week by energy minister Jeff Radebe due to “serious divisions” and dysfunction, spends R500,000 a month to rent 300 chairs, the Sunday Times reported at the weekend.

Read: This is how SA’s petrol prices doubled in 10 years – including a 165% increase in fuel tax

South Africans pay roughly 30% of fuel prices to tax, while the other 70% is influenced by the global price of Brent crude oil, transportation costs and the Rand’s strength to the US dollar. 

When Radebe announced that a litre of unleaded petrol will increase by 26c in July, pushing the price of litre past R16 in the inland for the first time, he said the petrol price was heavily influenced by the decreased value of the Rand to the dollar. 

The increase would have been 20c more if it wasn't for declining oil prices, he said. 

Here’s how RAF tax and the fuel levy (tax) on petrol increased compared to petrol prices and South African inflation on litre the past 10 years. 

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