The Democratic Alliance (DA) said it is willing to collaborate with Minister of Finance Enoch Godongwana to urgently reduce the Road Accident Fund (RAF) and general fuel levies by 50% for the duration of the oil price shock, or as long as possible.

As of April 1, petrol is set to increase by more than R5 per litre and diesel by more than R9 per litre, as the turmoil in the Middle East negatively affects the oil sector.

DA spokesperson on Finance Dr Mark Burke explained that, combined, the two levies contribute R6.35 to the overall price of fuel.

“A 50% reduction would dampen increases by R3.17 and provide immediate and essential relief to South Africans who are staring down the barrel of a massive petrol shock in a week’s time,” he said.

The party said it was aware that such a pause in levies would affect tax revenue as well as RAF funding, by about R6.5-billion a month.

“This is not insignificant, but the shock of not doing anything to protect South Africa’s fragile economy is likely far larger. Sharp petrol price increases will hurt GDP, increase inflation, and cripple household budgets,” Burke said.

He said he will be writing to President Cyril Ramaphosa and Godongwana to request urgent action on fuel price relief.

TRADE-OFF SUGGESTED

Burke noted that it was possible for government to recover the lost funds without new taxes and without new debt, with the DA proposing the Compensation Fund pay over its surpluses.

He highlighted that over recent years, National Treasury had given the Compensation Fund permission for the entity to retain sizable surpluses despite the fund having sufficient reserves to meet its liabilities.

“The Compensation for Occupational Injuries and Diseases (COID) Fund is meant to provide social security to workers yet suffers from years of mismanagement – evidenced by audit failures and is likely overfunded. In its 2024/2025 annual report it applied to retain a R21.7-billion surplus (despite receiving a disclaimer audit opinion). That’s more than 3 months’ worth of fuel taxes relief,” Burke explained.

He said surplus funds can be pulled from sector education and training authorities, noting that they were currently sitting on R6.7-billion in yearly surpluses, which he said was enough for one month’s relief.

He called for strengthening of the Targeted and Responsible Savings (TARS) programme, so that reluctant departments were forced to make cuts to outdated and inefficient programmes.

“Despite having few teeth, TARS has already found almost R12-billion in savings over the medium term. That’s a further two months' relief,” he said.

Burke also called for the extension of ghost worker audits at municipalities and State entities.

“What is more, many of these reforms would yield permanent savings, the fuel levy freeze is once off. In the long run South Africa’s finances won’t only be healthier because we were able to mitigate this oil shock, they will be stronger because spending will be less wasteful,” he said.