Market Update: We break down the business implications, market impact, and expert insights related to Market Update: Govt to cut fuel levy by R3/litre to ease price shock – Full Analysis.
Finance Minister Enoch Godongwana said the fuel levy will be reduced by R3 per liter for both petrol and diesel in April.
South Africa will reduce a tax imposed on fuel to offset the impact of surging oil prices on domestic fuel, Finance Minister Enoch Godongwana said.
The levy will be reduced by R3 per liter for both petrol and diesel in April, Godongwana said in an interview at the South Africa Investment Conference in Johannesburg on Tuesday. The measure will be announced at a briefing later in the day, he said.
LIVE | Crisis at SA fuel stations, Tshwane buses disrupted as depots run dry
“I will temporarily be lowering the fuel levy for this month of April by R3 and then I am still discussing what we can do for the next two months,” Godongwana said.
The measure, which comes as other oil-importing nations including South Korea and the Philippines take steps to soften the impact on their economies of the Iran war, signals concern about the potential implications for inflation and consumer demand.
South Africa’s central bank is targeting inflation of 3% and the government was projecting economic growth this year of 1.6% before the conflict began. Oil prices have surged almost 50% since the US and Israel attacked Iran on Feb. 28.
Data from South Africa’s Central Energy Fund suggested that as a result of the surge in oil and the weakening of rand against the dollar, the retail price for 95-octane petrol may jump almost 30% on Wednesday, with the wholesale cost of diesel expected to rise by more than half.
South Africa previously reduced its general fuel levy temporarily in 2022 to help offset a rise in prices after Russia’s invasion of Ukraine.
The fuel levy raised an estimated R97 billion in the financial year that ends on Tuesday, according to the National Treasury.