South Africa has announced R10 billion in fuel tax relief to ease the burden of record-high petrol and diesel prices on households and businesses amid global energy market disruptions.
Finance Minister Enoch Godongwana announced the measures on Wednesday during his mid-year budget speech, saying the general fuel levy would be reduced by R3 per litre of diesel and R1.50 per litre of petrol.
The relief is scheduled to take effect on November 4 and run until December 1, with a smaller reduction to continue into the new year.
The government expects the temporary cuts to cost R10 billion ($611 million) in forgone revenue. The shortfall will be offset by the return of funds previously transferred to the state-owned Central Energy Fund, which supports the country’s energy security.
The intervention follows a surge in pump prices in October, when petrol exceeded R30 per litre and diesel prices also climbed above that threshold. Higher paraffin prices have added to the financial pressure on low-income households that depend on the fuel for cooking and heating.
South Africa, Africa’s most industrialised economy, relies heavily on imported fuel and has been exposed to price volatility and supply disruptions linked to the US-Israeli war on Iran and restrictions affecting the strategic Strait of Hormuz.
The latest intervention follows a similar fuel-levy reduction introduced in March, as the government seeks to contain rising living costs ahead of next month’s local government elections.
Godongwana said the country was better positioned to withstand global economic pressures because of fiscal measures implemented over the past five years.
“Despite global volatility, South Africa is weathering the storm much better than its peers because we have been able to consistently take hard decisions over the last five years that have built our fiscal buffers and fortified our resilience,” he said.
The finance minister also reported an improved revenue outlook, supported by stronger corporate income tax, dividend tax and value-added tax collections, which have lifted the forecast for 2026/27.
However, he cautioned that much of the improvement reflected higher commodity prices and might not be sustained over the medium term.
South Africa’s economic growth outlook has weakened, with gross domestic product now projected to expand by 1.2 per cent in 2026, down from the 1.6 per cent forecast in February.
Growth is expected to improve to 1.6 per cent in 2027 and reach two per cent by 2029.
Meanwhile, public debt is projected to stabilise at 78.4 per cent of gross domestic product in the 2025/26 financial year, marking the first pause in its growth in nearly two decades.
The government hopes the fuel-levy reductions will provide temporary relief to consumers and businesses while limiting the wider economic impact of rising energy costs.
