Transport Dept researches new RAF levies for electric vehicles
“How are they going to contribute to the fund? This is research that we’re doing,” Transport Minister Barbara Creecy stated on the Sunday World Podcast regarding motorists driving electric vehicles who bypass traditional fuel taxes. As South Africa transitions away from fossil fuels, the Department of Transport is actively researching ways to expand the Road Accident Fund levy to capture revenue from non-petrol vehicles.
Currently, funding for the Road Accident Fund comes from the RAF levy attached to the per-litre sale of petrol and diesel in South Africa. That levy is set at R2.25 per litre following a 7-cent hike in 2026, which marked the first increase in five years. With electric vehicle adoption, fuel consumption is projected to decline, creating a concern for revenue collection for the fund. Minister Creecy emphasized the necessity of adapting revenue collection methods before traditional fuel sales drop significantly.
To close this gap, the Department of Transport is evaluating structural amendments that could attach the levy to motor vehicle registrations and/or licence renewals. This adjustment would ensure that drivers of electric and alternative-energy vehicles contribute to accident compensation schemes regardless of whether they purchase liquid fuels. Additional proposals involve applying the levy to all foreign-registered motor vehicles entering South Africa.
Energy Department Proposes Fuel Efficiency Standards and Rebates
While the transport department examines licensing mechanisms, the Department of Electricity and Energy has introduced separate strategies targeting vehicle emissions and fuel efficiency. The department’s draft National Energy Efficiency Strategy proposes mandatory fuel economy standards and a revenue-neutral feebate system. Under this proposed mechanism, efficient vehicles and electric cars falling below specific emission targets would receive financial rebates. In contrast, inefficient vehicles exceeding emissions thresholds would absorb levies to fund those rebates.
The transport sector accounts for 35% of total energy usage in South Africa, primarily through liquid petroleum fuels. The National Energy Efficiency Strategy sets a national target to reduce transport energy consumption by 43.3 petajoules. The draft strategy also recommends integrating eco-driving modules into national driver education curricula and professional certification programs, as driver behavior can influence fuel consumption by 15% to 20%.
South African automotive manufacturing is simultaneously facing pressure from international export markets. Regions like the European Union are tightening emissions regulations for new cars. Without mandatory fuel economy standards and localized production upgrades, domestic manufacturers risk losing access to export markets. To support this green transition, the Department of Trade, Industry and Competition published draft regulations in May 2026 proposing higher production credits and customs rebates for battery producers.
Future Levies and Relief for Consumers
Despite proposals from the Road Accident Fund to hike its fuel levy to R3.00 per litre, Minister Creecy has rejected any increase to the tax on petrol and diesel. Creecy stated in an interview with ENCA that consumers are under enough pressure and that management reforms at the fund must take precedence over tax hikes. Finance Minister Enoch Godongwana confirmed in the Medium Term Budget Policy Statement that tax collections have exceeded budgetary targets, with no mention of needing additional tax hikes.
The Department of Transport has not yet announced a definitive timeline for implementing the proposed licence renewal tax changes or registration levies. Legislative amendments must be brought in before there can be managerial solutions to the broader financial problems the fund faces.