Plan to permanently cut petrol prices by R6.55 per litre in South Africa

South African motorists could save more than R290 on a full tank of petrol under a long-term government plan to remove fuel levies. However, the proposal faces a major financial challenge: the government would need to replace billions of rand in revenue while finding a sustainable way to fund the Road Accident Fund (RAF).

Finance Minister Enoch Godongwana has confirmed that the National Treasury’s long-term objective is to remove the two main levies charged on petrol: the General Fuel Levy (GFL) and the RAF Levy. Removing these charges could reduce the petrol price by approximately R6.55 per litre, according to reports published on 26 October 2026.

The proposal comes as fuel prices put pressure on households and businesses across the country, increasing transport costs and making it more expensive to move goods.

The plan focuses on removing fuel related charges rather than trying to control the international price of petrol.

The levy generates approximately R80 billion annually for the national government. Phasing it out would require Treasury to find replacement revenue or reduce other spending.

2. Change how the Road Accident Fund is financed

The RAF levy currently adds roughly R2.25 per litre to petrol prices. Godongwana says the fund’s financing model would need to change so it no longer depends on this levy.

3. Review the remaining fuel price charges

The broader review could examine other levies, regulated margins and the fuel-price formula to identify further opportunities to reduce costs. Removing the two main levies alone would not necessarily eliminate every fuel-related charge.

The biggest obstacle is replacing the revenue that would disappear if the General Fuel Levy were abolished.

According to Godongwana, the levy generates around R80 billion a year. The government would have to decide how to replace that income without undermining public finances or shifting an excessive burden onto other taxpayers.

There is also the question of how to fund compensation for road accident victims if the RAF no longer receives money through fuel purchases. A different insurance or funding model would have to be developed.

The minister has not announced a detailed implementation timetable or a final replacement funding model. The permanent reduction therefore remains a long term objective, rather than an approved R6.55 per litre price cut.

Separately, the government announced a R10 billion temporary fuel levy relief package in its October 2026 mid-term budget.

These temporary reductions are separate from the proposal to eliminate levies permanently.

The bottom line South African motorists could eventually save around R6.55 per litre if the government removes the relevant levies and passes the full reduction on to consumers. But the plan’s success depends on two unresolved issues: replacing the General Fuel Levy’s substantial contribution to state revenue and establishing a sustainable alternative for funding the Road Accident Fund.

Sources: Plan to permanently cut petrol prices by R6.55 per litre in South Africa – Daily Investor, Plan to scrap taxes on petrol and diesel in South Africa – MyBroadband

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