Fuel relief won’t ease cost-of-living squeeze

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 windowNandi NtiniSocial Justice News Reporter

Opens in new windowOpens in new windowOpens in new windowOpens in new windowHerman MoloiJournalist

Opens in new windowOpens in new windowOpens in new windowOpens in new windowMichelle BandaJournalist

Opens in new windowOpens in new windowOpens 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 Story audio is generated using AI

Trade unions and organisations have warned that the government’s R10bn fuel relief is a temporary fix that will do little to ease the pain of soaring fuel prices and the rising cost of living.

The organisations said finance minister Enoch Godongwana’s fuel intervention offers only short-term breathing room while failing to address the wider impact of record fuel prices.

Godongwana stated in his medium-term budget policy (MTBPS) statement in the National Assembly on Wednesday that the mining sector was the largest contributor to an R17.1bn upward revision in gross tax revenue. Provisional corporate tax collections outperformed expectations due to high platinum group metal and gold prices – giving the country fiscus some relief.

However, General Industries Workers Union of South Africa (Giwusa) has called for the government to target industries benefiting from higher fuel prices, arguing that taxing their windfall profits could provide more meaningful relief to struggling households.

“Our members told us they were being forced to choose between getting to work and putting food on the table.” — Martlé Keyter of the Motor Industry Staff Association

“This relief is awfully inadequate, particularly considering it’s against a backdrop of record prices … and massive windfall profits for industries benefiting from this, including the petroleum industry, banking sector, mining and food industry,” Giwusa’s president Mametlwe Sebei.

Sebei said the government can expropriate the profits of those industries to subsidise people suffering from fuel increases.

“That is where the government should be focusing, as we believe there is enough there in the form of taxes to reduce fuel costs by 50% so it can be affordable and accessible to those that desperately need it.”

Godongwana said following sharp increases in petrol and diesel prices linked to the conflict in the Middle East.

Under the temporary measure, the fuel levy will be reduced by R3 a litre for diesel and R1.50 a litre for petrol from November 4 until December 1.

The relief will then continue at a lower level until January 5, when the diesel levy reduction will be R1.50 a litre and the petrol levy reduction will be R1 a litre.

Organisation Undoing Tax Abuse (Outa) CEO Wayne Duvenage said the relief would help motorists, but warned that the government needed to address the long-term tax burden on fuel and billions lost through wasteful spending and poor financial management.

He said consumers are feeling the pressure every time they fill their tanks, buy groceries or pay for transport.

“This relief will help, but only temporarily,” said Duvenage.

The Motor Industry Staff Association (Misa) also welcomed the announcement, saying the pressure of rising fuel costs had become a question of survival for workers forced to choose between travelling to work and putting food on the table.

Martlé Keyter, Misa CEO said: “Our members told us they were being forced to choose between getting to work and putting food on the table. Misa amplified that message directly to decision-makers and refused to let workers’ voices be ignored.”

The Road Freight Association said questions if the intervention would be sufficient but said it would ease pressure on businesses dependent on diesel to transport goods and people.

“The relief is significant, even if its sufficiency was difficult to determine, because avoiding an anticipated increase could make a substantial difference to freight companies already facing financial pressure,” said Duvenage.

The pressure comes after the price of Brent crude oil rose to more than $100 a barrel, while petrol and diesel prices in South Africa increased by nearly 50% and 72%, respectively, since domestic prices began rising because of the Middle East conflict.

In October, petrol reached R30.25 a litre and diesel R33.29 a litre, with further increases expected in November.

The sharp increases have had ripple effects across the economy, adding to the cost of living and prompting calls for immediate intervention.

Treasury said the temporary relief would help cushion households and businesses without compromising the sustainability of the budget.

Treasury director-general Duncan Pieterse said the R10bn was not new money but came from a revenue overrun in the 2025/26 fiscal year.

Pieterse said the intervention would support households, consumption and inflation, while future relief could be considered if it remained fiscally neutral and did not compromise the government’s fiscal targets.

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.