Finance minister Enoch Godongwana had bad news for motorists in his budget speech on Wednesday, confirming across-the-board increases to the fuel levy and carbon taxes.
He announced that from April 1, the general levy for petrol will increase by 9c/l and 8c/l for diesel. At the same time, the carbon fuel levy increases by 5c /l for petrol and 6c for diesel, and the Road Accident Fund (RAF) levy goes up by 7c.
He said the fuel levies are in line with inflation, and the increases are lower than last year. In 2025 the general fuel levy (GFL) increased by 16c/l for petrol and by 15c/l for diesel.
For a litre of petrol from April, the GFL will increase to R4.10 /l, the carbon fuel levy to 19c and the RAF levy to R2.25.
For diesel the GFL will be R3.93/l (up from R3.85), the carbon fuel levy will be 23c and the RAF levy will be R2.24.
The GFL is a tax charged on every litre of fuel sold. It is not ring-fenced for specific projects such as roads, but is used to fund general government expenditure. It is one of South Africa’s largest indirect tax sources and the state collects about R80bn a year through the fuel levy.
The carbon tax is an environmental tax designed to help address greenhouse gas emissions and climate change. Introduced in 2019, the levy is added per litre of petrol and diesel sold, linking fuel consumption to the amount of carbon dioxide emissions it produces. While intended to support a transition to a low-carbon economy, the funds are not specifically reserved for green projects and are pooled into the general budget
Only the RAF levy is intended for a “dedicated fund” used for compensating victims of road accidents.
The government previously announced that it would undertake a review of the fuel price formula to address high costs for households and businesses.
In October 2024, mineral and petroleum resources minister Gwede Mantashe stated that the underlying price of petrol and diesel should be about R14/l but that levies were pushing retail prices above R20/l. He explained that these levies were “distorting” the fuel price and said the government wanted to separate these components so that the actual fuel price would be more transparent.
However, these promised reviews have not yet led to changes in the fuel price formula or significant price relief at the pumps.
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