South Africa to temporarily cut fuel levy on diesel and petrol — Daily Maverick
South African Finance Minister Enoch Godongwana presented a medium-term budget statement on October 21 that provides for a temporary reduction in the fuel levy amid rising fuel prices. From November 4 to December 1, 2026, the levy will be reduced by 3 rand per litre of diesel and by 1.50 rand per litre of petrol, according to the published full text of the speech by Daily Maverick.
After December 1, the relief will remain in place at a smaller scale until January 5, 2027: the fuel levy on diesel will be reduced by 1.50 rand per litre and that on petrol by 1 rand. The government estimates this support at 10 billion rand, which will also be the amount of revenue lost by the budget. It is planned to be financed by returning 10 billion rand previously transferred to the Central Energy Fund to the National Revenue Fund.
Growth forecast downgraded
The government also lowered its forecast for South Africa's real GDP growth in 2026 from 1.6% to 1.2%. Under the new estimates, the economy is expected to grow by 1.6% in 2027 and by 2% by 2029. The statement cites the prolonged conflict in the Middle East, more expensive energy resources and the possible impact of El Niño on producers' costs and production volumes among the risks to the economy.
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At the same time, the government said that the ratio of public debt to GDP had stabilised at 78.4% in the 2025/26 fiscal year and is expected to continue declining. The budget deficit forecast for the current year was improved to 4.3% of GDP, compared with 4.5% expected in February. By 2030, the deficit is expected to decline to 2.5% of GDP under the government's plan.
Infrastructure and budget rules
Tax revenue for the 2026/27 fiscal year was revised upward by 17.1 billion rand compared with the February estimate. This is primarily due to higher revenue from corporate income tax, dividends tax and VAT. At the same time, the government noted that part of this improvement is driven by commodity prices and may disappear in the medium term.
In October, the government released draft legislation on a fiscal anchor for public consultation, which is expected to be submitted to parliament in 2027. It provides that each administration will set its own budget targets and report to parliament on their implementation. Separately, the government said that Ifisa, the newly created structure for supporting infrastructure projects, is already overseeing projects with a potential value of more than 207 billion rand.
