The government is facing mounting pressure to temporarily suspend planned fuel levy increases as the escalating military conflict between the US and Iran drives global oil prices higher.
Both Business Leadership South Africa (BLSA) and Cosatu are calling on the government to temporarily suspend or reduce the fuel levy to cushion the economy from the April fuel price hikes driven by the US-Iran war with BLSA also urging a delay on the new fuel tax increases announced in the February 2026 budget.
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/l for diesel, and the Road Accident Fund (RAF) levy goes up by 7c.
The BLSA has called on the government to deploy the fuel levy as its most immediate economic stabiliser, drawing a direct comparison to emergency measures taken at the outbreak of the Russia-Ukraine war in 2022 when authorities temporarily cut the levy to cushion consumers and businesses.
“The tax lever is therefore the most immediate lever to pursue, but it can only be temporary so as not to damage our fiscal position, BLSA CEO Busi Mavuso said in her weekly newsletter.
“The fuel taxes announced in the February budget can be delayed. Unfortunately, our strategic oil reserves are not in a state to support any solutions — South Africa’s strategic stocks are small — about two to three weeks’ worth against the global 90-day benchmark, and the country’s reduced refining capacity limits how much relief they could realistically provide.
“Longer term, we must deliver supply diversification, better stock management and refinery logistics.”
The call comes as Brent crude benchmarks respond to heightened geopolitical risk in the Strait of Hormuz, a critical chokepoint for global oil flows, with fears from market watchers that any further sustained blockade or military escalation could trigger price shocks.
Cosatu, the largest trade union federation, has also warned that without government intervention in April, the fuel increases would be a bloodbath for workers and the broader economy.
“Cosatu demands urgent action by government to cushion society from the massive fuel price hikes due to come into effect from the beginning of April of R5.41 per litre of petrol and R8.84 per litre of diesel. These hikes are due solely to the war of aggression in the Middle East and the havoc it has caused to international oil and gas supplies and prices,” Cosatu’s Matthew Parks said.
“Whilst appreciating the very limited fiscal space of the state, Treasury’s public statement that ‘there is nothing they can do’ is simply unacceptable and a shocking abdication of leadership and responsibility to cushion society, in particular the working class, and the economy from the spillover of the latest war of insanity unleashed in the Middle East.”
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.