Supplementary Budget 2020

Road Accident Fund fuel levy requires 'large increase'

Treasury has warned that the Road Accident Fund represents a potentially large liability, and the 30c/l increase in the levy earlier this year may not be enough.

The levy was upped in late February from 163c/l to 193c/l. The RAF is a state-owned entity that provides compulsory cover for users of SA roads against injuries or death arising from accidents within SA. 

According to Treasury's medium-term budget policy statement, tabled before Parliament by Finance Minister Tito Mboweni on Wednesday, the fund's liability is expected to grow from R206bn currently to R393bn by 2021/22.

"The RAF will require further large increases to the fuel levy in each of the next three years to manage the short-term liability," the policy statement read.

It did not say by how much the RAF levy may increase. If the levy is raised, it will likely be announced in the main 2018 Budget. 

Treasury named the RAF among five other state-owned enterprises which present a fiscal risk.

In August, Treasury told the Standing Committee on Appropriations that the RAF's claims outweigh its income, compromising its ability to pay out claims. The petrol price is at an all-time high at R17.08 per litre in inland provinces. Government intervened in September, limiting fuel hikes to 5c/l given consumer pressures.

* Visit Fin24's 2018 mini budget hub for all the news, views and analysis.

* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER

ZAR/USD
17.00
(-0.09)
ZAR/GBP
21.24
(-0.12)
ZAR/EUR
19.14
(-0.13)
ZAR/AUD
11.81
(-0.13)
ZAR/JPY
0.16
(-0.20)
Gold
1774.74
(+0.03)
Silver
18.05
(+0.01)
Platinum
808.00
(+0.25)
Brent Crude
42.78
(-0.79)
Palladium
1914.01
(+0.62)
All Share
54521.90
(-0.17)
Top 40
50179.89
(-0.26)
Financial 15
10150.02
(-0.64)
Industrial 25
76554.73
(+0.52)
Resource 10
50138.02
(-1.24)
All JSE data delayed by at least 15 minutes morningstar logo
Company Snapshot
Voting Booth
Please select an option Oops! Something went wrong, please try again later.
Results
I'm not really directly affected
18% - 1592 votes
I am taking a hit, but should be able to recover in the next year
23% - 2085 votes
My finances have been devastated
35% - 3133 votes
It's still too early to know what the full effect will be
25% - 2257 votes
Vote