Haemorrhaging RAF staggers along

Nearly R2 out of the almost R17 paid for every litre of fuel, a levy which has increased by more than 300% in the past 10 years, now goes directly to the insolvent and dysfunctional Road Accident Fund (RAF).

Although the RAF levy already makes up 36% of all government-imposed levies on the fuel price, further increases are likely because the fund now has a monthly average of R9-billion in claims in arrears.

In an average month, the fund will receive R4-billion from two billion litres of fuel sold, economist Mike Schussler has estimated. According to the fund’s financial statements, total revenue for the 2017-2018 financial year amounted to R37.34-billion (up from last year’s R33.34-billion).

The RAF’s net deficit increased sharply to R206-billion by the end of the 2017-2018 financial year.

During last month’s medium-term budget policy statement, Finance Minister Tito Mboweni warned that the fund’s liability could grow to R393-billion by 2021-2022.

“The RAF will require further large increases to the fuel levy in each of the next three years to manage the short-term liability,” he said.

During the 2017-2018 year, Paul Modipa, the general manager of the forensic and investigation department, reported that fraudulent claims amounting to R1.259-billion had been identified before they were paid out.

“We have rotten apples within the RAF,” said Modipa.

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