Government responds to pleas for fuel price relief

Share current article via EmailShare current article via FacebookShare current article via TwitterShare current article via LinkedInLinda EnsorParliamentary Correspondent

Opens in new windowOpens in new windowEnter fullscreen mode displaying this image.ExpandThe fuel levy will be reduced by R3 per litre for diesel and R1.50 per litre for petrol from November 4 to December 1. In this picture, customers fill up at Astron Energy Centenary Road, on March 31. File picture: Werner Hills The Treasury has responded to the cost of living crisis by allocating R10bn for temporary fuel levy relief.

Finance minister Enoch Godongwana made the announcement in his medium-term budget policy statement (MTBPS) speech, in the National Assembly on Wednesday.

In terms of the relief, the fuel levy will be reduced by R3 per litre for diesel and R1.50 per litre for petrol from November 4 until December 1. Thereafter, the relief will continue at a lower amount until January 5 — the diesel levy will be reduced by R1.50 per litre and the petrol levy by R1 per litre.

The Treasury said the intervention would help ease cost-of-living pressures without compromising the sustainability of the budget.

“Geopolitical conflict has pushed up global oil prices and led to a sharp rise in the cost of living for businesses and households,” Godongwana said. “Because we have rebuilt fiscal buffers, government is in a stronger position to respond, including by providing temporary fuel levy again.”

The price of Brent crude oil has risen to more than $100 a barrel and petrol and diesel prices in South Africa have soared by nearly 50% and 72%, respectively, since domestic prices started rising as a result of the conflict in the Middle East. This caused ripple effects throughout the economy and contributed to a spike in the cost of living.

Petrol and diesel prices rose to R30.28 and R33.29 per litre in October, with further increases expected in November, prompting calls for immediate relief.

The R10bn for the fuel levy relief is not new money. Treasury director-general Duncan Pieterse explained during a media question-and-answer session before Godongwana’s speech that it arose from a revenue overrun in the 2025/26 fiscal year.

This was allocated in the Second Special Appropriation Bill to the Central Energy Fund’s (CEF’s) Equalisation Fund, to stabilise basic fuel price volatility linked to international market pressures and to cushion consumers.

Pieterse said the CEF would surrender the R10bn to the National Revenue Fund for fuel levy relief, which he said was positive for households, consumption and inflation.

He stressed that this would not affect the fiscal framework. Future relief might be considered, he said, as long as it was fiscally neutral and did not affect the fiscal framework and fiscal targets. It would be difficult to consider if it compromised fiscal targets and the fiscal trajectory.

The R10bn allocated to the CEF has not yet been used as the Second Special Appropriation Bill still has to be adopted by the National Assembly. The allocation has so far earned nearly R342m in interest.

The envisaged R10bn fuel levy relief will be in addition to the estimated R17.2bn relief (it actually materialised to relief of about R22bn-23bn) granted in April, May and June, which took the form of temporary cuts to the general fuel levy of up to R3.00/l for petrol and a final total of R3.93/l for diesel.

The relief measure was designed to be fiscally neutral, being funded through a combination of higher-than-expected tax revenue and underspending. It was not expected to have an effect on the fiscal framework adopted by parliament following the 2026 Budget.

Would you like to comment on this article?Sign up (it's quick and free) or sign in now.

Please read our Comment Policy before commenting.