Godongwana slashes fuel levies

The fuel levy will be reduced by R3 per litre for diesel and R1.50 per litre for petrol from 4 November 2026 up until 1 December 2026 to provide temporary relief to motorists and industry.

Minister of Finance Enoch Godongwana announced this fuel relief in his Medium-Term Budget Policy Statement (MTBPS) speech in parliament on Wednesday.

Godongwana said this relief will continue at a lower amount until 5 January 2027, with the diesel levy reduced by R1.50 per litre and the petrol levy by R1 per litre.

“This intervention will help ease cost of living pressures without compromising the sustainability of the budget,” he said.

Godongwana said 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 (CEF) will be returned to the National Revenue Fund to finance this relief,” he said.

The MTBPS said fuel levy collections are expected to normalise following the relief provided in 2026/27.

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National Treasury director-general Duncan Pieterse said the R10 billion arises from revenue overruns in the 2025/26 fiscal year.

Pieterse said that at the time of the 2026 Budget, they allocated this amount to a special appropriation for CEF.

“What is now happening as far as this MTBPS is that we have agreed with the CEF that they are going to surrender that R10 billion into the National Revenue Fund and that R10 billion will then be deployed for fuel levy relief, which the minister [Godongwana] will announce today.

“We do not anticipate that the fuel levy relief that the minister [Godongwana] will announce will cost more than the R10 billion,” he said.

Pieterse was guarded in his comments on possible future fuel levy relief.

He said the way National Treasury evaluates this relief is that in their view, the fuel levy relief is positive for households, positive for consumption, positive for inflation and positive for the economy.

Pieterse stressed that the question is whether Treasury can provide that fuel levy relief in a fiscally neutral manner.

“We don’t want to compromise our fiscal targets because of the broader benefits to the economy of meeting those targets to provide fuel relief.

“So it’s always a discussion that is happening carefully and on a case-by-case basis.

“What is happening on the revenue side and what is happening on the expenditure side, and what does that mean for the space that we have for fuel levy relief and the possibility of that continuing. That is how we approach it.

“If there is space in the fiscal framework to do so, then it’s something that we will continue to explore.

“If there is no space in the fiscal space to do so and fuel levy relief is going to compromise our broader fiscal targets and the fiscal trajectory we are on, then it becomes obviously very difficult to consider,” he said.

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President Cyril Ramaphosa indicated earlier this week that fuel price relief was under consideration, stating that the government was considering further measures to cushion South Africans against increasing fuel prices.

Ramaphosa said the cost of previous government intervention to cushion consumers against rising fuel prices was about R24 billion, diverted from other programmes.

The National Treasury estimated that temporary fuel levy reductions between April and June 2026 cost R17.2 billion in foregone tax revenue, funded by higher-than-expected revenue and underspending.

A previous four-month fuel levy relief package in 2022 cost R10.5 billion, according to the Treasury’s 2023 Budget Review.

The MTBPS said the general fuel levy shared with metropolitan municipalities is allocated an additional R13.4 billion.

Pieterse said the metros are getting 23% of what is collected from the fuel levy, which was part of a decision made years ago to ensure that metros have a consistent revenue base from initial taxes that were phased out at the time.

“This adjustment is about ensuring that their [metros] share of the fuel levy aligns with that 23% requirement,” he said.

Parliament’s Standing Committee on Appropriations has approved a report on a proposed R10 billion fuel stabilisation allocation to the Department of Mineral and Petroleum Resources, funded through the National Revenue Fund.

However, the bill has not yet been approved by parliament.

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Read our full in-depth and up-to-date MTBPS 2026 coverage here.

Rising spending and uncertain revenue threaten fiscal sustainability.