WATCH | Godongwana and Mantashe agree to temporary fuel levy cut

A joint statement by finance minister Enoch Godongwana and mineral and petroleum resources minister Gwede Mantashe announced a two-phased response to fuel price pressures that are expected to emerge as a result of the US-Iran war. This intervention will include a temporary reduction to the general fuel levy from R4.10 per litre to R1.10 per litre, and continued work to review fuel pricing methodology and formula over the medium term. The statement was released on Tuesday.

The announced interventions come as South Africans are encountering notices of fuel rationing at petrol stations, and business associations sound the alarm about diesel shortages, which are expected to affect different sectors. Through the joint statement, the ministers said consultations have been held between the National Treasury and the department of mineral and petroleum resources to explore measures to provide short-term relief to consumers, while maintaining a stable and sustainable fuel supply system. “The agreed approach consists of an immediate intervention for the next month, and a broader package of measures to support households and key sectors of the economy …

[These are] a temporary reduction in the general fuel levy and addressing fuel security concerns and the minister of mineral and petroleum resources’ continued work to review fuel pricing over the medium term.” It is estimated the partial reduction in the fuel levy will cost around R6bn in foregone tax revenue for the one-month period. The relief measure will be re-evaluated on a monthly basis for the following two months The statement said Godongwana proposes the general fuel levy is temporarily reduced by R3 per litre from April 1 to May 5. “This will reduce the general fuel levy for petrol from R4.10 per litre to R1.10 per litre and reduce the general fuel levy for diesel from R3.93 per litre to R0.93 per litre for one month.

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These amounts exclude other levies such as theRoad Accident Fundlevy and the Carbon Fuel Levy. “It is estimated the partial reduction in the fuel levy will cost around R6bn in foregone tax revenue for the one-month period. The relief measure will be re-evaluated on a monthly basis for the following two months.” The statement said in reaching the decision, Godongwana sought to balance the socioeconomic impact on the country and welfare impact on South African consumers, specifically regarding food and transport inflation, with the fiscal objectives announced in the February budget. “The relief measure is designed to be fiscally neutral, and the government will implement mechanisms to recoup the foregone revenue within the fiscal framework approved during the 2026 budget.” The statement stressed there was sufficient fuel supply in the country to meet current and projected demand and motorists and businesses are encouraged to purchase fuel responsibly and avoid unnecessary stockpiling.

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