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Road Accident Fund in deep financial trouble

As South Africans buckle under the pressure of fuel price hikes, RAF’s annual report reveals that it only has around R1.5 billion in cash to pay claims from road accident victims.

Picture: Supplied

CAPE TOWN - Amid calls from opposition parties to put a freeze on fuel levies due to the ever-increasing cost of fuel, the Road Accident Fund (RAF) is in deep financial trouble.

In February, then Finance Minister Malusi Gigaba announced 30 cents a litre increase in the fuel levy.

But the fund says despite substantial increases in the levy over the last three financial years, it's under-funded and R26.3 billion in the red.

As South Africans buckle under the pressure of fuel price hikes, RAF’s annual report reveals that it only has around R1.5 billion in cash to pay claims from road accident victims.

Currently, R1,93 per litre of fuel bought goes to the fund. This is expected to inject R9 billion into this year's fund financial year the same amount in claims, waiting to be paid out since March.

In the past financial year, the fund had a budget of R37.3 billion, during which time it processed more than 200,000 claims, more than ever before.

The fund says the road accident benefit scheme - currently under consideration by Parliament and which will work under a no-fault basis - will improve the management of compensating road accident victims.

(Edited by Mihlali Ntsabo)

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