Cape Town – Transport Minister Barbara Creecy has ruled out seeking an increase in the fuel levy while she remains in office, saying motorists are already under too much financial pressure and the government must first address problems at the Road Accident Fund (RAF).
Her comments come after petrol prices surged this month, pushing 95-octane petrol to R30.25 a litre in Gauteng and other inland areas.
The latest increase, which took effect on Wednesday, saw 93-octane petrol rise by R3.12 a litre and 95-octane petrol by R3.33. Diesel prices also increased, adding to pressure on households and businesses.
Speaking to eNCA, Creecy said she would not ask National Treasury to increase the levy to help fund the RAF.
“As long as I’m in this job, we will not apply to National Treasury for an increase in the fuel levy. I think consumers are under enough pressure,” she said.
The minister’s position comes after the RAF proposed raising its levy to as much as R3 a litre, arguing that its current funding model was no longer sufficient to meet its financial obligations.
The fund is financed partly through a levy included in the price motorists pay for fuel.
According to BusinessTech, the RAF argued that higher fuel prices and lower fuel sales volumes had reduced its levy revenue, while its financial obligations continued to grow.
Creecy, however, said the priority should be fixing the fund’s management and finances rather than placing another burden on consumers.
The minister said the RAF board had been dissolved last year and replaced with an interim board. Cabinet has also approved the appointment of a new chief executive, she said.
“We’ve got to sort out the finances and the management so that we stop wasting money,” Creecy said.
She also wants changes to the RAF’s legislation, including a defined schedule of benefits and a form of no-fault compensation system.
Under such a system, compensation would be determined according to a set schedule of benefits rather than relying on lengthy legal disputes over liability.
Creecy argued that expensive litigation had contributed to the fund’s financial problems and made it harder to ensure that claimants received fair compensation.
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Compiled by Glaan Sibuyi
