Godongwana’s R10bn fuel relief falls flat as petrol drops by just 1 cent

Johannesburg – South African motorists will see almost no relief in petrol prices despite Finance Minister Enoch Godongwana’s R10-billion fuel levy intervention, with petrol prices dropping by just one cent per litre in November.

The Department of Mineral and Petroleum Resources announced on Tuesday that the new fuel prices will take effect from Wednesday, 4 November, with diesel motorists benefiting from significantly larger reductions.

According to Daily Investor, both 93 and 95 petrol will decrease by one cent per litre, while diesel prices will fall by R1.10 and R1.20 per litre, respectively.

The marginal petrol reduction comes despite Godongwana announcing R10 billion in temporary fuel levy relief during his Medium-Term Budget Policy Statement (MTBPS) on 21 October.

Under the intervention, the general fuel levy will be reduced by R1.50 per litre for petrol and R3 per litre for diesel between 4 November and 1 December. The relief will then be reduced to R1 per litre for petrol and R1.50 per litre for diesel until 5 January 2027.

However, rising international petroleum prices, a weaker rand and an increase in the slate levy have largely eroded the benefits of the intervention.

BusinessTech reported that the rand weakened from an average of R16.21 to R16.55 against the US dollar during the review period, adding further pressure to fuel import costs.

The slate levy, which helps recover under-recoveries in the fuel pricing system, has also increased from 87.66 cents to 135.84 cents per litre, adding to the pressure on motorists.

The department attributed the increases in international fuel costs to higher demand in the Northern Hemisphere and global supply pressures.

Reuters also reported that diesel prices would fall substantially while petrol prices remained largely unchanged following the government’s tax intervention.

The fuel relief is intended to cushion households and businesses against rising transport and living costs, with fuel increases feeding into the prices of goods and services.

According to SAnews, Godongwana said the intervention would provide R10 billion in support to consumers and businesses.

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

The R10 billion will be funded through money previously transferred to the Central Energy Fund (CEF), which will be returned to the National Revenue Fund to finance the temporary levy reductions.

Meanwhile, the November adjustments are not entirely positive for consumers. Wholesale illuminating paraffin prices will increase by R2.75 per litre, while liquefied petroleum gas (LPG) will rise by R1.83 per kilogram.

The latest adjustments highlight the challenges facing government as it attempts to shield consumers from global energy price pressures while maintaining fiscal stability.

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