Transport Minister Barbara Creecy said her department is still looking at new ways to raise money for the Road Accident Fund (RAF). One option is a new compulsory fee linked to car licence discs.
Creecy said the fund needs more sources of income because more South African motorists are moving away from petrol and diesel. She spoke about the plan in an interview with the Sunday World Podcast.
“We have to look at the fact that there’s a big shift to electric vehicles,” Creecy said.
“At the moment, the funding for the road accident fund comes from the fuel levy, but going forward into the future, more people may not be using fossil fuels,” she added.
According to TopAuto, Creecy said raising more revenue is a top priority in her department’s plan to fix problems at the RAF.
The RAF pays compensation to people hurt in road accidents. It gets its money from the RAF levy, which is built into the price of petrol and diesel.
The levy adds R2.25 to every litre of fuel. It brings in about R45 billion to R50 billion, TopAuto reported.
Even so, the fund is technically insolvent. TopAuto said this is the result of years of mismanagement and heavy spending on costly court cases to settle claims.
The Department of Transport said hybrid and electric cars are a threat to how the fund is paid for. These cars use little or no fuel, so their owners pay little or nothing towards the levy.
Electric car owners can still claim from the RAF if they are in an accident. The department said a new source of money is needed to make up for the growing number of these cars.
“So how are they going to contribute to the fund? This is research that we’re doing,” Creecy said.
She said the law would have to change before the fund’s money problems can be fully dealt with.
“We need to bring in amendments; until we bring in those amendments, there’s a limit to which there can be managerial solutions to some of the broader financial problems that the fund faces,” she said.
One idea is a new levy on all foreign-registered cars that enter South Africa. Another is a compulsory fee on vehicle registrations and licence disc renewals.
It is not yet clear if the licence disc fee would apply to all motorists, no matter what kind of car they drive. TopAuto said that if it does, owners of petrol and diesel cars would pay twice, through the fuel levy and the new fee.
Earlier in October, the RAF said it wanted to raise the fuel levy from R2.25 to R3.00 per litre. That 75c increase would be a 33% rise in one year.
In its annual report for 2025/26, the fund said the levy had not kept up with inflation and that it was losing money as a result.
Creecy said she would not support that increase. She said motorists are already struggling with high fuel prices caused by the war in Iran.
“As long as I’m in this job, we will not apply to the National Treasury for an increase in the fuel levy,” she told eNCA.
“What we have to do is sort out the mismanagement that has happened at the Road Accident Fund for a long time,” she said.
Creecy said the fund should stop wasting money instead of asking the public to cover its failures. Her department is still going ahead with its plan to find new income for the RAF, TopAuto reported.
Source: this article is based on reporting by TopAuto.co.za. Image: TopAuto.co.za. Written with the help of AI and published by the Tzaneen Voice News desk. See our Editorial Standards.
Kgomotso Maake covers news and politics for Tzaneen Voice. Kgomotso reports on government, Parliament, municipalities, courts, crime and service delivery across South Africa, with a close eye on how national decisions reach towns like Tzaneen and the wider Limpopo province. Stories are written in plain English and focus on the facts: who made the decision, what it means, and what happens next.