AA wants fuel price transparency
Are South African petrol and diesel buyers getting what they pay for?
Consecutive fuel price increases, driving record petrol and diesel retail costs, have many industry analysts, transport economists and fleet owners questioning the value composition of South Africa’ s fuel price structures.
Nearly all countries have fuel taxes as a pay-as-you-use system of road tax. The more a vehicle drives, the more fuel tax it pays. Those taxes fund roads, transport infrastructure, maintenance, and upgrades. That’ s why the general fuel levy is the largest additional tax on fuel.
South Africa has some of the highest proportional fuel taxes globally and some of the most variable road infrastructure. Some of the country’ s driving roads are globally renowned. But some of its secondary tar roads have gone nearly completely to ruin, with surfaces eroded and decaying into dirt roads.
Clearly, the enormous revenue the government receives from an unavoidable administered fuel tax isn’ t being proportionately reinvested in road infrastructure. The general fuel price levy is highly functional in its extraction, but poor in its deliverables.
Containing inflation and derisking the possibility of South Africa entering a growth-limiting interest rate-hike cycle are crucial issues linked to the fuel price. Ramagwede wants the Ministry of Finance and the Department of Energy to think more creatively about solutions.‘ We need to think of fuel prices, taxes and the stability of the fiscus. And the recent general fuel levy relief has proven there is room to manoeuvre.’
Fuel price breakdown needed
Automobile Association( AA) CEO Bobby Ramagwede is one of the industry thought leaders who want greater transparency into the exact fuel pricing structure and modelling methodology. To help South Africans understand where those component fuel tax revenues are being deployed.
Ramagwede feels that South Africa needs a review of its fuel tax structure to reflect prevailing realities.‘ Some of the fuel price taxes and line items date from the late 1990s. The global oil market, South African economy and transport realities are very different now.’
South Africans know that the Road Accident Fund has enormous liabilities, and that all its funding is the third-largest tax add-on to the fuel price. But what about the basic fuel price calculations? With most of the country’ s petrol and diesel now imported rather than locally refined, does that merit changes to the basic fuel price calculation?
Ramagwede feels there needs to be urgency and transparency.‘ What are we actually paying for? We need a breakdown of the commodity fuel price to determine whether any outdated legacy taxes or levies are lurking. And what can be adjusted.’
For the AA CEO, it’ s about managing factors driving fuel price inflation.‘ South Africans need to spend less on fuel, as a liquid energy commodity. And more in other discretionary sectors of the economy, generating a broader spectrum of VAT income for the fiscus. Instead of strangling so much disposable income and tax revenue into transport energy costs.’
WORDS IN ACTION 4 MAY 2026