Godongwana reduces fuel levy until January – Here’s by how much
· Citizen
Finance Minister Enoch Godongwana has answered the call by South Africans to offer relief by reducing the fuel levy.
Godongwana, while delivering his medium-term budget policy statement (MTBPS) on Wednesday, said the fuel levy will be reduced by R3 per litre for diesel and R1.50 per litre for petrol from 4 November 2026 until 1 December 2026.
Visit palladian.co.za for more information.
This relief will also continue until 5 January 2027. “The relief will continue at a lower amount until 5 January 2027. The diesel levy will be reduced by R1.50 per litre and the petrol levy by R1 per litre,” he said.
Godongwana delivers relief
This follows Concerned Citizens of South Africa (CCSA) taking to the streets to demand lower fuel prices and cuts to or the removal of government-imposed fuel levies, including the General Fuel Levy and the Road Accident Fund (RAF) levy.
The MTBPS, often referred to as the “mini-budget”, is an annual update presented to Parliament that outlines the country’s three-year fiscal framework, including government spending, revenue projections and economic priorities.
It guides the national budget and acts as a report card that promotes transparency and fiscal discipline, and tracks progress on reducing deficits and managing public debt.
Cost of providing fuel levy
The general fuel levy is a consumption tax added to every litre of petrol and diesel that goes straight into the National Treasury for general state spending. RAF levy is a separate compulsory tax per litre used exclusively to compensate victims of road accidents.
Temporarily reducing the levies costs the National Treasury. Earlier in the year, Godongwana provided the same relief of temporarily reducing the fuel levy. This cost the Treasury at least R17.2 billion.
The latest reductions will cost R10 billion.
“These measures will provide R10 billion in support, at a fiscal cost of R10 billion in foregone revenue. To fund this relief, the R10 billion that was transferred to the Central Energy Fund will be returned to the National Revenue Fund and put into the Contingency Reserve,” said Godongwana.
Fuel levy tax to normalise
According to Treasury, fuel levy collections have been weak, mainly due to the temporary general fuel levy relief implemented between April and June 2026. However, this will normalise once the relief ends.
“Windfall tax gains from high commodity prices provide a near-term benefit to revenue collection, while fuel levy collections are expected to normalise following the relief provided in 2026/27.”
Godongwana said National Treasury shares fuel levy revenue with municipalities, and it has allocated R13.4 billion to metropolitan municipalities.
“We are increasing the general fuel levy allocation by R13.4 billion, restoring the metros’ share to 23% over the medium term.”
Who benefits from this relief?
Godongwana said the relief will ease cost-of-living pressures without compromising the budget’s sustainability.
Questions have been raised about who benefits most from the fuel levy reduction: struggling households or the rich?
Professor of Economics at North-West University, Waldo Krugell, said the high-income group benefited most when the fuel levy was reduced earlier in the year.
“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.”