News24 | New fuel levy relief to take pressure off consumers until end of 2026

Finance Minister Enoch Godongwana.

Graphic: Mihle Mdashe/News24. Photo credit: Chris J. Ratcliffe/Bloomberg via Getty Images; bluebay2014/Getty Images; Waldo Swiegers/Bloomberg via Getty Images

• Finance Minister Enoch Godongwana has announced a reduction in fuel levies for November and December.
• The relief will see fuel levies decrease by as much as R3 per litre for diesel and R1.50 per litre for petrol. The reduction will then be lowered to R1.50 per litre for diesel and R1 per litre for petrol until 5 January 2027.
• National Treasury says previous fuel levy relief cost as much as R23 billion in lost revenue.
• For more financial news, visit News24 Business.

Finance Minister Enoch Godongwana has announced a temporary reduction in the general fuel levy, after pump prices hit record levels in October.

In his Medium-Term Budget Policy Statement, Godongwana announced a relief of R3 per litre for diesel and R1.50 per litre for petrol, from 4 November to 1 December this year, then lowered to R1.50 per litre for diesel and R1 per litre for petrol until 5 January next year.

Petrol prices rose by as much as R3.33 in October, with 95 unleaded petrol costing a record R30.25 in Gauteng and R29.38 on the coast. Wholesale diesel (0.05% sulphur) costs R31.96 in Gauteng, and R31.08 on the coast.

Meanwhile, the latest data from the Central Energy Fund shows a projected increase of R1.52 per litre for 95 unleaded petrol and R1.59 for 93 unleaded in November.

The wholesale price of diesel (0.05% sulphur) is currently on track for a hike of around R1.25 per litre.

READ | As SA motorists suffer, govt’s R10bn for fuel relief sits unused

“These measures will provide R10 billion in support, at a fiscal cost of R10 billion in foregone revenue. To fund this support, the R10 billion that was transferred to the Central Energy Fund will be returned to the National Revenue Fund to finance this relief,” Godongwana said, adding that the rebuilding of “fiscal buffers” allowed for the relief to take place.

Government previously announced a fuel levy relief between April and June this year to accommodate increasing fuel costs.

What are the costs?

Speaking to the media on the day, National Treasury director-general Duncan Pieterse said the fuel levy relief was “positive for households, consumption, inflation and the economy”.

However, he said the relief should be provided in a fiscally neutral manner that does not compromise government’s spending and debt targets.

“It [fuel levy relief] is always a discussion happening in Treasury on a case-by-case basis, including what is happening on the spending side and the revenue side, and what this means for the space of fuel levy relief and the possibility of this continuing. If there is space in the fiscal framework, we will continue to explore it. If fuel levy relief will compromise fiscal targets, it is difficult to consider,” Pieterse said in a briefing.

He added: “We do not anticipate that the fuel levy relief will cost more than the R10 billion [allocated].”

Treasury has also estimated that levy relief and behavioural change (consumers buying less fuel) will contribute to weaker fuel levy collections for the 2026/27 financial year, resulting in a deviation of up to R31 billion.

Treasury originally budgeted R104.9 billion in fuel levy collections for the 2026/27 financial year. However, the new estimate has been revised down to R74 billion.

“Fuel prices are higher, and people are buying less fuel. When we announced the first set of relief, we thought the relief would cost us R17 billion, but it cost us slightly more, close to R22 billion and R23 billion,” Pieterse said.