Temporary relief for Mzansi as government reduces fuel levy

Dylan Bettencourt

The government is trying to soften the blow for motorists when filling up their tanks by reducing the fuel levy by R1.50 per litre until the end of May. 

Finance minister Enoch Godongwana announced the drop in fuel levies as fuel prices continue to increase globally. 

The levy for petrol will now be R2.35 per litre from the previous price of R3.85 per litre. The diesel levy will be reduced from R3.70 to R2.20 per litre. 

In an attempt to reduce the risk this decrease brings to the country’s debt, the government will sell R6 billion of its state strategic oil. 

The government announced further plans for fuel prices, set to come into effect from 1 June: 

  • A reduction in the basic fuel price of 3c per litre.
  • The Demand Side Management Levy (DSML) of 10c per litre on 95 unleaded petrol sold inland will be scrapped.
  • A price cap will be introduced on 93 octane petrol, which means retailers can sell below the regulated prices.
  • Government will stop publishing guidelines on diesel to promote greater competition.
  • The Regulatory Accounting System will be reviewed to see whether adjustments can be made to lower the margins over the medium term.

The price of fuel in South Africa has increased by over 30% in the last year, with another increase set for next week. 

The price of fuel was due to increase R1.81 per litre of petrol and R1.73 per litre of diesel. However the levy cuts mean the prices per litre will only increase by 23c and 31c respectively. 

“The intention of the temporary reduction is to support a phasing in of the fuel price increases that we are expecting in the short term. This will go some way in assisting South Africans to adjust to the new reality,” Godongwana said in Parliament. 

Parliament also backed recommendations to remove the Road Accident Fund (RAF) levy from fuel prices to further reduce the economic strain on South Africans. 

Image source: @DailyMaverick