The DA has called for a 50% reduction in the fuel levy, warning South Africa is facing a sharp and immediate fuel price shock driven by escalating conflict in Iran.
Speaking at a press briefing, DA finance spokesperson Mark Burke said petrol is expected to increase by more than R5 a litre and diesel by more than R9 a litre in the coming price adjustment. He argued intervention is necessary to limit the economic fallout.
Burke said he has written to President Cyril Ramaphosa and the minister of finance requesting urgent intervention on fuel price relief and fuel supply security.
The DA’s proposal would result in an estimated R3.17 a litre reduction across petrol and diesel through a temporary halving of the general fuel levy and the Road Accident Fund levy.
The intervention is linked to rising global oil prices after the escalation of conflict in Iran, which has disrupted supply expectations and increased volatility in energy markets. Iran sits at the centre of key global oil routes, including the Strait of Hormuz, and any threat to supply in that region has an immediate impact on global oil prices. These increases are compounded by a weaker rand, which raises the cost of imported fuel. For SA, as a net importer of fuel, this feeds directly into domestic fuel prices and broader inflation.
The expected increase at the pumps is therefore not only a direct cost for consumers, but is also likely to have wider economic effects, including upward pressure on food prices, transport costs and overall inflation.
Burke said the timing of the intervention is critical, warning that even a temporary spike in prices would have lasting economic consequences.
“It is my estimation that a fuel price shock on April 1, but then it gets reduced shortly after that, is still a shock and will have a pronounced effect on our economy.”
He said the party would prefer relief measures are implemented before the full price adjustment comes into effect.
The DA acknowledged that halving the fuel levy would reduce revenue by about R6.5bn a month, affecting National Treasury and Road Accident Fund income. However, Burke argued the economic cost of not intervening would be significantly higher.
To offset the loss in revenue, the DA has proposed drawing on existing state resources rather than introducing new taxes or increasing debt. This includes accessing surplus funds in the Compensation Fund, which retained about R21.7bn despite audit concerns, and redirecting excess reserves from Sector Education and Training Authorities estimated at R6.7bn. Additional measures include strengthening Treasury’s spending review programme to enforce departmental savings and expanding audits to identify ghost workers across municipalities and state-owned entities.
Burke said the proposal would not require changes to the fiscal framework adopted by parliament.
“We’re not amending the fiscal framework that was passed, we’re not tinkering with appropriations,” he said, adding the approach instead substitutes revenue from the fuel levy with alternative funding sources.
He noted that any technical adjustments, if required, could be made through the rates bill or existing regulatory mechanisms available to the minister of finance.
Burke said the DA stands ready to assist in identifying and implementing funding solutions, emphasising the proposal is intended as a practical intervention rather than a disruption to the budget process.
He said the DA remains committed to ensuring the budget cycle proceeds smoothly, while arguing government cannot ignore the impact of global shocks on the domestic economy.
The proposal places pressure on Treasury to weigh the fiscal cost of a fuel levy reduction against the broader economic risks associated with a sustained increase in fuel prices. In the absence of intervention, the expected price increases are likely to feed directly into inflation and household expenditure in the coming months.
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