petrol price south africa
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Finance Minister Enoch Godongwana has tabled a proposal that will see the fuel levy being reduced by R1.50 cents per litre.

Making a statement to a sitting of the National Assembly on Thursday, Godongwana said the temporary fuel levy cut will come into effect on Wednesday next week, and will remain in effect until the end of May.

This will help cushion the blow that rising fuel prices are having on consumers after Mineral Resources and Energy Minister Gwede Mantashe warned that fuel prices are likely to increase even further this month.

“The intention of the temporary reduction of the general fuel levy is to support a phasing in the fuel price increases that we are expecting in the short term.

“This will go some way in assisting South Africans to adjust to the new reality,” he said.

With the Russia-Ukraine conflict continuing to impact the price of crude oil globally, this has had a direct impact on fuel prices in South Africa.

In March this year, the petrol price rose to R21.60 cents per litre of 95 ( (ULP and LRP) petrol in the inland region, while the price of diesel prices also rose.

Godongwana’s proposal will reduce the levy for petrol from R3.85 cents per litre to R2.35 cents per litre, while the levy on diesel will be reduce from R3.70 cents per litre to R2.20 cents per litre.

“These amounts exclude other levies such as the Road Accident Fund levy and the carbon fuel levy,” he said.

Reduction to be funded by sale of crude oil reserves

The Minister said the proposed reduction of the general fuel levy, for a period of two months, will not require adjustments to the annual national budget, as the proposal is not expected to have an impact on the fiscal framework.

“The proposed reduction of the general fuel levy will be funded by liquidation of a portion of the strategic crude oil reserves.

“In this instance, the revenue foregone by the reduction in the levies will be recouped through a sale of strategic crude oil reserves, which are held by the Strategic Fuel Fund, which is a subsidiary of the Central Energy Fund. The sale would be required to raise around R6 billion,” he said.

Godongwana said with the fuel levy reduction being a temporary measure, a broader package of relief measures will be explored, and they will come into effect after the expiry of the two-month fuel levy reduction. –