Finance Minister Enoch Godongwana announced the provision of temporary assistance amounting to R10 billion in the form of a reduction in the fuel levy. This measure is aimed at mitigating the effects of rising oil prices caused by the conflict in the Middle East and supporting households and businesses.
During the presentation of the Medium Term Budget Policy Statement for 2026 (MTBPS) in Parliament yesterday, Godongwana noted that the conflict has led to an increase in global oil prices, which has resulted in a sharp rise in the cost of living for the population and businesses.
He stated that thanks to the restoration of fiscal reserves, the government is in a stronger position to react, including the reintroduction of a temporary fuel levy reduction. The Minister informed parliamentarians that the National Treasury is aware of the pressure that rising fuel prices are putting on businesses and families.
Godongwana announced a reduction in the fuel levy of R3 per litre of diesel and R1.50 per litre of petrol. These changes will take effect from November 4, 2026, and will last until December 1, 2026. Further assistance will be provided in a smaller amount until January 5, 2027.
The Minister clarified that these measures will provide support amounting to R10 billion, with the fiscal cost being R10 billion in lost revenue.
To finance this temporary support of R10 billion, which was transferred to the Central Energy Fund (CEF), it will be returned to the National Income Fund and placed in the Contingency Reserve. Director-General Duncan Peters explained that the origin of these R10 billion is related to the overspending of revenues for 2025/26, which was allocated in the Special Appropriation Bill for the CEF.
Peters explained that the CEF will receive these funds through the Special Appropriation Bill, return them to the National Income Fund, and then these R10 billion will be used to compensate for the costs of the fuel levy reduction.
As part of the MTBPS, Godongwana projected real economic growth at 1.2%, which is lower than the forecast of 1.6% made in February. However, growth is expected to reach 1.6% in 2027 and 2% by 2029.
The Minister added that gross tax revenue is projected to increase from R2.14 trillion in the current year to R2.53 trillion in 2029/30. Various funds were allocated through the Appropriation Bill: R6.2 billion for unforeseen and unavoidable expenses, mainly for disaster relief and rehabilitation.
Additionally, R823 million was allocated to SANDF for troop deployment to assist the police in combating crime, and R516 million for the Madlang, Hampepe, and Nkabinde inquiry commissions. Godongwana also mentioned that the Special Appropriation Bill includes funds for Parliament and for the continuation of medical services for South African Armed Forces veterans.
SARS will also receive allocations to strengthen tax collection measures. Within this corrective budget, R150 million has been allocated to improve the technical capabilities of the digital services unit for developing the MyMzansi application, which will allow citizens to access government services through a single digital platform. Furthermore, the Contingency Reserve will increase to R10 billion to respond to potential threats related to El Niño and other risks.
It was noted that projects valued at at least R20 billion are currently being assessed in the infrastructure budget fund. Godongwana also stated that next year the SAPS fleet will be modernized with R810 million, and R2.2 billion has been added to enhance the independence of the judicial system.
The MK party stated that the 1.6% growth forecast proved unrealistic, and that real economic growth was 1.1%. The party called this a 'heavy accusation against the management of our economy' and suggested that the fuel price assistance was announced in connection with local elections.
DA Finance representative Kingsley Wakelin welcomed the National Treasury's steps in the MTBPS, especially the commitment to the fiscal anchor, continued primary surplus growth, and debt stabilization for the first time in almost two decades. He emphasized that these are important steps towards restoring confidence in South Africa's public finances after the deterioration from 2008 to 2024, but noted that fiscal stability must be the foundation of economic growth, not the limit of government ambition.
ActionSA MP Alan Bisley expressed disappointment with Godongwana's announcement of short-term fuel price reduction measures, which are insufficiently effective to alleviate the devastating cost of living crisis and do not address the fundamental problems undermining the South African economy. He stated that the temporary fuel levy reduction of R10 billion, valid until January 2027, is grossly inadequate to solve the high fuel price problem, as these costs have led to increased prices for food, basic goods and services, as well as almost all transport-dependent sectors of the economy.
