South Africa announces $609 million for fuel levy relief

South Africa will allocate about $609 million for temporary fuel tax relief, Finance Minister Enoch Godongwana announced on Wednesday, as the government seeks to cushion consumers from rising fuel costs while containing public debt.

Presenting the 2026 Medium-Term Budget Policy Statement, Godongwana said stronger-than-expected tax revenue had provided room for the intervention. The Treasury collected about $3.3 billion more than previously projected.

The government will cut the general fuel levy by about 18 US cents per litre for diesel and 9 US cents for petrol from November 4 to December 1, followed by smaller reductions through January 5, 2027.

The Treasury expects the main budget deficit to narrow to 3.9% of gross domestic product (GDP) in the current financial year, down from the 4% forecast in February. However, economic growth for 2026 has been revised down to 1.2% from 1.6%.

Public debt stabilised at 78.4% of GDP in the 2025/26 financial year, although debt-servicing costs continue to constrain government spending.

To strengthen fiscal discipline, the government plans to table fiscal-anchor legislation in Parliament in 2027. It has also identified a further $2.32 billion in savings over the medium-term expenditure period through cuts to low-priority programs, reduced administrative duplication and measures to curb social-grant fraud.

The government says the temporary relief will help ease pressure on households and businesses while keeping public finances on a sustainable path.