MTBPS: Will Godongwana temporarily suspend the fuel levy? Here’s what you can expect
· Citizen
With fuel prices squeezing household budgets and motorists demanding urgent relief, all eyes are on Finance minister Enoch Godongwana as he prepares to deliver the 2026 Medium-Term Budget Policy Statement (MTBPS) in Cape Town on Wednesday.
Millions of South Africans are asking whether the minister will once again step in to ease pressure at the pumps or leave motorists to shoulder the rising cost of fuel alone.
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On Monday, the Concerned Citizens of South Africa (CCSA) took to the streets, demanding a reduction in fuel prices and calling for cuts to, or the removal of, government-imposed fuel levies, including the General Fuel Levy and the Road Accident Fund (RAF) levy.
Earlier this year, Godongwana introduced temporary fuel levy relief amid the economic fallout from the conflict in the Middle East. Now, with motorists again looking to government for a lifeline, the big question is whether he will repeat that intervention in Wednesday’s mini-budget.
Why you should care about the MTBPS
The MTBPS, often called the mini-budget, is the government’s mid-year update on the country’s finances, setting out its spending plans, revenue expectations, and debt outlook for the next three years.
Ordinary citizens rarely pay attention to the MTBPS or the earlier budget speech because some believe they have nothing to do with them. However, that’s not true.
For ordinary South Africans, the mini-budget matters because decisions made today shape the services we rely on, the taxes we pay and the country’s economic prospects.
From social grants and healthcare to education, infrastructure, and job creation, the MTBPS offers an important indication of the government’s priorities and whether it manages public money in a way that supports a better future for all.
2026 so far
Professor of Economics at North-West University, Waldo Krugell, noted that when Godongwana delivered his budget speech in February, he sketched the government’s worst-case scenario: war, oil supply issues, a weaker rand, and higher interest rates. By April, it had happened: the Middle East conflict.
On Wednesday, Godongwana will tell South Africans what the conflict costs, and who pays.
Scenario B: escalating geopolitical tension, higher oil and gas prices, a weaker rand, delayed rate cuts and slower spending, was also included earlier in the year.
Krugell said the Middle East conflict shock has become too expensive for government to control. Before the shock, the government needed to collect more money than it spent (excluding interest payments) by an amount equal to 2.9% of the economy each year to keep its debt from growing relative to GDP.
After the shock, it needs a bigger surplus, 3.7% of GDP, to achieve the same result. The shock has added an extra annual burden equal to 0.8% of the entire economy.
In practical terms? The government must now either raise more taxes, cut spending, or find other ways to improve its finances to keep its debt stable.
Will 2026 MTBPS deliver relief for households?
The government’s first response was to cut the fuel levy by R3 a litre from April, and in May to take the diesel levy to zero. However, Krugell noted that the relief hardly registered at the pump because the price of fuel kept increasing.
“October’s adjustment then added another R2.84 to diesel and R3.33 to petrol,” he said.
Poor households felt the oil shock in the taxi before they felt it at the till.
“Petrol and diesel hardly feature in a poor household’s budget.
“In the Consumer Price Index (CPI) basket, the poorest fifth of households spend 0.2% of their budget on fuel for their own vehicles and 6.9% on taxi and bus fares. For the richest fifth, it is the other way round: 6.4% on fuel and 0.8% on fares. Food takes 38% of the poorest budget and 10% of the richest.”
So, according to Krugell, whether Godongwana will suspend the fuel levy depends solely on whether he has the money for it.
“So, roughly speaking, relief per litre per month costs R2 billion in foregone income. And then, if you suspend the whole fuel levy, it’ll cost money, and whether he has the money is difficult to say.”
Has government reached its revenue targets?
Krugell said the Treasury’s director-general, Duncan Pieterse, is confident that the government will meet its revenue targets, with better collections and some higher company tax than they budgeted for initially.
So will Godongwana want to spend the public’s funds on fuel price relief? It’s a difficult one. However, it is worth understanding who benefitted the most from the fuel levy suspension implemented this year.
Treasury spent at least R17.2 billion on the fuel levy, and most of the people who benefited are from the high-income group, said Krugell.
“I followed the relief through the three channels I can measure: cheaper fuel for a household’s own car, cheaper fares, and cheaper food. Then I asked how much reached each fifth of households,” he said.
“About R1 billion, one rand in every seventeen, reached the poorest 40% of households. The same R17.2 billion paid through the child support grant would have been R1 364 per child: more than two months’ extra grant.”
What should Godongwana do?
Krugell said that instead of suspending the fuel levy, Godongwana could increase social grants, since they go directly to disadvantaged households.
“If he does want to help households, specifically poor households, it’s much better to just take that money and up the child support grant, something like that. The system’s already there. Nothing new to administer or anything like that.
“Help for the poor should be targeted, temporary, and paid for inside the budget, which the revenue overrun makes possible. Electricity reform is cheap in rands and expensive in political will. Where it does need money, it will come as guarantees, and those deserve the same scrutiny as debt.”
Transport minister Barbara Creecy has delivered relief for motorists by refusing to apply to Treasury for an increase in the RAF fuel levy.
Will Godongwana bow to mounting public pressure and temporarily suspend the fuel levy, or will motorists be left waiting for relief?