Cape town: The temporary reduction in the general fuel levy, initially set to conclude in early May, has been extended until June, as announced by the National Treasury and the Department of Mineral and Petroleum Resources on Tuesday. This extension aims to mitigate the adverse effects of escalating fuel prices on inflation and economic growth.
According to South African Government News Agency, the decision to extend the relief measures was influenced by the ongoing Middle East conflict, which has maintained pressure on global oil prices, consequently increasing domestic fuel costs. On 31 March 2026, a joint announcement by the Minister of Finance and the Minister of Mineral and Petroleum Resources introduced a temporary reduction in the general fuel levy of R3 per litre from 1 April to 5 May 2026, providing short-term respite for households.
The government emphasized that the relief measure is intended to be fiscally neutral, with plans to recover the foregone revenue within the fiscal framework approved during the 2026 Budget. The extension of the fuel levy reduction aims to further alleviate inflationary pressures and economic challenges stemming from rising fuel prices.
The proposed relief measures for May and June 2026 include maintaining the R3 per litre reduction for petrol until 2 June 2026. Additionally, due to expected significant increases in diesel prices, temporary relief for diesel will rise by 93 cents to R3.93 per litre, effectively reducing the levy to zero from 6 May to 2 June 2026. Consequently, the general fuel levy will stand at R1.10 per litre for petrol and R0.00 per litre for diesel.
For June 2026, the relief level will be halved to phase out the measure before July. This adjustment will reduce relief from the general fuel levy to R1.50 per litre for petrol and R1.96 per litre for diesel from 3 June to 30 June 2026. The general fuel levy will then increase to R2.60 per litre for petrol and R1.97 per litre for diesel.
From 1 July, the general fuel levy for petrol will revert to R4.10 per litre, and for diesel, it will return to R3.93 per litre. The cost of the temporary fuel levy relief from April to June 2026 is estimated at R17.2 billion in foregone tax revenue. The relief is designed to be revenue neutral, funded through higher-than-expected tax revenue and underspending, ensuring no impact on the fiscal framework adopted by Parliament after the 2026 Budget.
Additionally, the Department of Mineral and Petroleum Resources has begun reviewing the formula that regulates fuel prices, with conclusions expected to influence future regulation. Adjustments to the Slate levy on petrol and diesel for May will accommodate the under-recovery of petroleum product importers, according to the Self Adjusting Slate mechanism.
Earlier statements from the Department indicated that a comprehensive review of the local fuel price mechanism is underway, with completion anticipated by March next year.
