Petrol price problem in South Africa

The Road Accident Fund’s inefficiency is one of the reasons South Africa’s petrol price is higher than it needs to be, professor emeritus Hennie Klopper has told MyBroadband.

Klopper responded to a recent Road Accident Fund (RAF) media briefing in which the agency claimed the government urgently needed to increase the fuel levy.

“The RAF is one of the reasons why the levy is R2.18,” said Kopper, a practising attorney since 1973 and a retired private law professor who taught at the University of Pretoria.

South Africa’s petrol price for September is R21.79 per litre for unleaded 93 inland.

The RAF levy alone makes up 10% of South Africa’s petrol price.

Klopper said the RAF had wasted about R48 billion on unnecessary litigation in the past twenty years, contributing to the high levy.

Another major reason the levy was so high was the carnage on South Africa’s roads, he said.

The number of deaths and injuries on South African roads generates some 100,000 claims against the RAF annually.

However, Klopper pointed out that the RAF has a staff complement of 2,400, with which it only manages to finalise about 30% of claims.

The remaining cases, with an estimated value of R11 billion, are carried to the following financial year.

To this point, RAF corporate communications head McIntosh Polela said during the media briefing last week that their operating model is based on litigation, which is unsustainable.

Polela said that suing the state for people injured in accidents to access their benefits shouldn’t be allowed.

Klopper said this statement was plainly false.

“The statement suggests that the RAF does not seem to have a clear conception of the RAF Act, which it is legislatively and Constitutionally obliged to administer,” he said.

“The system is not based on litigation as is stated, but on common law. What is recovered by claimants as clearly stated by the Act are not benefits but loss or damage suffered.”

Klopper explained that the Act contains provisions that actively encourage the settlement of claims without the need for litigation. It also actively discourages litigation.

“Some of these RAF provisions carry the sanction of loss of claim and an adverse legal cost order where there is non-compliance of early disclosure of information requirements, or where there is unnecessary and speculative litigation by claimants,” he said.

“The fact that the RAF is a litigant is a direct consequence of the RAF’s failure to timeously and effectively deal with lodged claims.”

Klopper explained that the RAF’s inefficiency and dilatoriness forced claimants to resort to litigation to enforce and prevent prescription of their claims.

Prescription is a legal principle where a debt or claim becomes uncollectible after a certain amount of time has passed.

“The RAF is a delinquent litigant, as has been stated by a number of judges,” Klopper said, pointing to a recent case presided by Judge Dennis Davis.

“It does not investigate claims as it should and, in many instances, simply ignores summonses served upon it,” he added, citing a separate ruling from September 2024.

Klopper also cited a recent Daily Maverick article in which lawyers raised the alarm about how the RAF was crippling the Gauteng High Court.

However, Klopper said this situation was not only confined to Gauteng.

“Its dereliction of its legislative duty to investigate and settle claims has resulted in it being faced with default judgments and has had an adverse impact on High Court Rolls,” he said.

“Finally, the reduction of the deferred payment of judgments obtained by claimants is touted as an indication of the successful administration of the RAF when the mere fact that such a system exists, indicates quite the opposite,” said Klopper.

He said this comes at a considerable cost in interest that accrues on deferred payments of around R1 billion annually.

“The RAF is engaged in a media campaign which is effectively a whitewash of the real situation and also to prepare the public for the cuts in compensation that it is proposing,” warned Kloppers.