Good news for motorists as South Africa cuts fuel levies

Cape Town – South African motorists are set to receive temporary relief from record fuel prices after Finance Minister Enoch Godongwana announced reductions to the general fuel levy in his 2026 Medium-Term Budget Policy Statement on Wednesday.

The National Treasury will reduce the levy by R1.50 per litre for petrol and R3 per litre for diesel from 4 November to 1 December 2026.

The relief will then be scaled back until 5 January 2027, with the petrol levy reduction decreasing to R1 per litre and the diesel reduction to R1.50 per litre.

Godongwana said the government would fund the intervention by returning R10 billion transferred to the Central Energy Fund to the National Revenue Fund, where it would be allocated to the Contingency Reserve.

“Because we have rebuilt fiscal buffers, government is in a stronger position to respond, including by providing temporary fuel levy relief again,” Godongwana said.

The announcement comes after petrol and diesel prices reached record levels in October, placing additional pressure on households and businesses.

Inland 95-octane petrol costs R30.25 per litre, while wholesale 50ppm diesel reached R33.29 per litre. Petrol has increased by R9.95 per litre since March, while diesel has risen by R14.69 over the same period.

The sharp increases have been driven largely by volatility in international oil markets linked to the conflict involving the United States, Israel and Iran, alongside disruptions affecting the Strait of Hormuz, a key global oil transit route.

South Africa’s annual inflation rate rose to 4.5% in September from 4.4% in August, with transport inflation accelerating to 10.8%, partly reflecting higher fuel costs.

The latest intervention follows earlier fuel levy reductions introduced between April and June to cushion consumers against rising prices. Those measures were subsequently scaled back and withdrawn as fuel costs continued to climb.

The government had previously warned that permanently absorbing fuel price increases through the national budget could place additional pressure on public finances.

Godongwana said: “Permanently offsetting these increases through the budget would ultimately shift the cost to taxpayers or increase government borrowing,” according to MyBroadband.

Although the latest levy reductions are expected to ease some of the pressure on motorists, their impact will depend on movements in international petroleum prices and the rand-dollar exchange rate.

The temporary intervention is therefore aimed at providing relief to consumers while limiting the long-term impact on government revenue and spending.

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