By Levy Masiteng
The Automobile Association (AA) has slammed the fuel levy increase announced by Finance Minister Enoch Godongwana in his budget speech on Wednesday.
The General Fuel Levy (GFL) will increase by 16 cents per litre for petrol and 15 cents per litre for diesel, effective 4 June.
Godongwana described this adjustment as the sole new tax proposal for the 2025/26 financial year, citing inflationary pressures as the reason for the hike.
The AA has warned that it would have far-reaching consequences.
The association said that while it recognised the need to address fiscal pressures, continuously turning to fuel levies to fill budget gaps was unsustainable—especially in the absence of transparency on how these funds were allocated and used.
“Fuel is a critical input cost across all sectors of the economy; any increase inevitably drives up transport and operational costs, further intensifying inflation. Lower-income households, which spend a greater share of their income on transport, will be disproportionately affected by this rise,” the AA said.
With the recent adjustments, the combined total of the GFL and the Road Accident Fund (RAF) Levy will push the cost to over R6.00 per litre in certain areas. This amount represents more than 30% of the total pump price, excluding the base fuel cost, distribution margins and retail mark-ups.
The association said that the fuel levy increase was not the only issue affecting commuters.
Johannesburg’s Rea Vaya Bus Rapid Transit (BRT) system has lost a whopping R313 million public transport grant due to operational failures.
This setback not only hurt the city’s mobility agenda, but also affected low-income commuters who relied on affordable transportation.
“This is not just a financial loss; it’s a missed opportunity to improve the lives of thousands of Johannesburg residents who depend on public transport to access work, education and essential services,” said AA CEO Bobby Ramagwede.
The Rea Vaya system is plagued by incomplete corridors, underutilised buses, and limited connectivity, leaving commuters with limited options.
The AA emphasised that the fuel levy hike would increase transport costs, worsen inequality and harm economic growth.
To address this, association has called for a comprehensive review of South Africa’s fuel pricing model, emphasising the need for transparency and reform.
The proposal includes a forensic audit of revenue from the GFL and RAF Levy to review allocation and expenditure, and publishing the fuel price-setting formula by the Department of Mineral Resources and Energy for full transparency.
It also wants stakeholders to be engaged to identify fair revenue models and explore alternative funding options to reduce reliance on fuel taxation.
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