Mayibongwe Maqhina|Published
Finance Minister Enoch Godongwana has announced R10 billion in temporary fuel levy relief as government moves to cushion households and businesses against rising oil prices driven by the conflict in the Middle East.
Tabling the 2026 Medium Term Budget Policy Statement (MTBPS) in Parliament yesterday, Godongwana said the conflict has pushed up global oil prices and led to a sharp rise in the cost of living for businesses and households.
“Because we have rebuilt fiscal buffers, government is in a stronger position to respond, including by providing temporary fuel levy again,” he said.
The minister told MPs that the National Treasury was aware of the pressure that rising fuel prices were placing on households and businesses.
Godongwana announced that the fuel levy will be reduced by R3 per litre for diesel and R1.50 per litre for petrol from November 4, 2026 up until December 1, 2026.
The relief will continue at a lower amount until January 5, 2027.
“These measures will provide R10 billion in support, at a fiscal cost of R10 billion in foregone revenue,” he said.
Special Appropriations Bill
He explained that in an effort to fund the temporary relief, R10 billion that was transferred to the Central Energy Fund (CEF) will be returned to the National Revenue Fund and put into the Contingency Reserve.
“This intervention will help ease cost of living pressures without compromising the sustainability of the budget.”
Director-general Duncan Pieterse explained that the origins of the R10 billion related to revenue overrun from 2025/26 that was placed on the Special Appropriations Bill for allocation to the CEF.
“We put it in this budget in agreement with CEF. They will receive it through the Special Appropriations Bill, surrender it back to the National Revenue Fund and that surrendered R10 billion will be used to offset the cost of the fuel levy relief,” said Pieterse.
In his MTBPS, Godongwana projected real economic growth of 1.2%, down from the 1.6% projected in February.
“Growth is expected to reach 1.6% in 2027, and 2% by 2029.”
Allocations made via the Adjustment Appropriation Bill
The minister added that the gross tax revenue was projected to increase from R2.14 trillion this year to R2.53 trillion in 2029/30.
Godongwana made several allocations via the Adjustment Appropriation Bill and allocations for the next three years.
R6.2 billion was allocated for unforeseeable and unavoidable expenditure, mostly for disaster relief and rehabilitation.
A further R823 million was allocated for the SANDF for the deployment of troops to assist the police to fight gang-related crimes and to combat illegal mining and R516 million for the Madlanga, Khampepe and Nkabinde commissions of inquiry.
Godongwana also said the Special Appropriation Bill includes allocations to Parliament and for the continued provision of health care services to retired members of the South African National Defence Force.
SARS will also receive an allocation to boost its tax collection measures.
“In this adjustment budget, R150 million is allocated towards enhancing the technical capabilities of the digital services unit to lead the development of the MyMzansi app, which will allow citizens to access government services through a single digital platform.”
The minister said the Contingency Reserve will increase to R10 billion to respond to the potential threats associated with El Niño and other risks.
Opposition parties weigh in
At least R20 billion has been earmarked for infrastructure projects currently in evaluation in the budget facility for infrastructure.
Godongwana also said the SAPS fleet will be recapitalised to the tune of R810 million next year and that R2.2 billion has been added to enhance the independence of the judiciary.
The MK Party said the 1.6% growth project has proved unrealistic and that real economic growth was at 1.1%.
“This is a dire indictment of the management of our economy,” the party said.
It also said the fuel price relief was conveniently announced for the local government elections.
DA spokesperson on finance Kingsley Wakelin said they welcomed the steps taken by National Treasury in the MTBPS, particularly the commitment to a fiscal anchor, the ongoing growth of the primary surplus and debt stabilising for the first time in nearly two decades.
“These are important steps towards restoring confidence in South Africa’s public finances after the fiscal deterioration from 2008 to 2024. However, fiscal stability must be the foundation for economic growth, not the limit of the government's ambition,” Wakelin said.
ActionSA MP Alan Beesley said his party was disappointed by Godongwana’s announcement of short-term fuel relief measures that do not go far enough to ease the devastating cost-of-living crisis and fail to address the fundamental problems that continue to undermine South Africa’s economy.
“The temporary fuel levy relief, amounting to R10 billion and set to expire in January 2027, falls desperately short of addressing the impact of high fuel prices. These costs have driven up the prices of food, basic goods and services, and virtually every part of the economy that depends on transportation,” he said.