The government of South Africa on Tuesday announced a temporary reduction in fuel taxes aimed at cushioning the impact of soaring global oil prices triggered by the ongoing conflict involving Iran.
In a joint statement, the country’s finance and petroleum ministries said the general fuel levy would be cut by three rand (about $0.18) per litre for a period of one month.
Despite the tax relief, motorists will still face steep increases at the pump. Diesel prices are expected to rise by more than seven rand per litre — a jump of around 40 percent — marking one of the sharpest increases on record. Petrol prices, while still lower than diesel, will also increase by roughly 15 percent.
The price of paraffin, a fuel commonly used by lower-income households for lighting, heating, and cooking, will surge by as much as 93 percent, raising concerns about the impact on vulnerable communities.
Authorities estimate the temporary tax cut will cost about six billion rand (approximately $352 million) in lost revenue. However, the government said the measure would remain fiscally neutral, with the shortfall expected to be recovered through adjustments elsewhere in the national budget.
Finance Minister Enoch Godongwana acknowledged that the funding source for the relief had not yet been determined. Speaking to journalists, he said, “I don’t know where I’m going to find this money for now.”
The move comes as the government continues to navigate political and economic pressures following tensions within the coalition government led by the African National Congress after the 2024 general election. A previous proposal to increase value-added tax had triggered divisions within the unity administration.
Officials said discussions were ongoing to develop additional measures to support households and critical sectors of the economy as global energy prices continue to climb.
Oil markets have been rattled since the war involving the United States and Israel against Iran disrupted tanker traffic through the Strait of Hormuz, one of the world’s most important oil shipping routes. The disruption has fueled fears of supply shortages and sent energy prices sharply higher worldwide.
Unlike several countries in the region, South Africa has largely avoided widespread fuel shortages. However, some filling stations reported running out of supply as motorists rushed to purchase fuel ahead of the latest price increases.
Minibus taxi operators, who provide the main form of public transportation for millions of South Africans, have warned that they may increase fares in response to the rising fuel costs.
