If it were only parliament that had the power to change the fuel levy, South Africans would suffer amid the conflict in the Middle East without any immediate response by government to ease the financial strain, finance minister Enoch Godongwana argues in opposing the EFF’s case, which seeks to strip him of the power to change the fuel levy.
The EFF’s application before the Western Cape High Court wants parliament alone to have the power to change the fuel levy, arguing the constitution gives taxing powers to MPs, not the National Treasury.
The case has far-reaching implications for Treasury’s legal powers over revenue collection and comes in the wake of its having recently lost the power to change VAT.
The US and Israeli war against Iran has caused instability in fuel prices globally, and Godongwana argues that if the power over the fuel levy is removed from the Treasury, millions of South Africans would suffer because MPs would take months to conclude debates and adopt a solution.
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The Treasury, as part of its response to the conflict, last month decreased the fuel levy by R3/l to cushion consumers from the impact of a steep monthly increase as a result of higher global oil prices
“If the applicant [the EFF] were to succeed, any ability to provide an immediate cut (or where circumstances dictate an upward adjustment) would be near impossible,” Godongwana argues in court papers.
“It would mean that parliament would have to subject any change in the fuel levy to the same tax-and-spend measures for parliamentary approval, including public consultation. That would mean parliament would only be able to act months later.”
The conflict in the Middle East, which may continue for a long time, has materially increased risks to global energy markets.
The rapidly increasing oil prices have been compounded by associated increased costs in the product chain, he said.
He maintains the downward adjustment of the fuel levy is larger than the fuel levy increase the EFF took the state to court for in 2025. Last year the general fuel levy increased by 9c/l for petrol and 8c/l for diesel.
The recent decrease in the fuel levy renders the EFF’s case moot because the main basis of the application, which was the 2025 increase, has been contradicted by the 2026 levy cut, Godongwana argues.
“That means any prejudice to consumers claimed by the applicant as the harm relied on by it to ground its application has now been reversed.”
The fuel levy cut “will cost about R6bn and will be funded by other adjustments in the government’s finances, particularly recouping the cost within the approved fiscal framework for the 2026 budget.
“The latest downward adjustment has neutralised the one complained of, and [therefore] the factual basis for the applicant’s case has now lapsed.”
Godongwana contends the move shows the government’s commitment, as a policy choice, to ensure any adjustment to the fuel levy is cost neutral.
“The fuel levy adjustment is affected by market conditions, is polycentric and is sensitive to global events. Unlike what is contended for by the applicant, the fuel levy adjustment is not a substitute for lost VAT income after the abandoned VAT increase of 2025.”
Last April, Godongwana withdrew a proposed 0.5 percentage point VAT increase after the DA took the state to court and due to pushback from other political parties.
The minister, in his papers, sheds light on the impact of the withdrawal of the VAT increase, maintaining it created a material shortfall in the revenue in the budget.
“Had the VAT increase gone ahead, tax revenue was expected to rise from R1.86-trillion in 2024/25 to R2.29-trillion in 2027/28 (the three-year budgetary cycle).
“Due to the abandonment of the VAT increase, tax revenue projections were revised down by R61.9bn. Tax policy measures proposed in the May 2025 budget overview were expected to raise an additional R18bn in 2025/26 and provide R1bn in relief in 2026/27.
“If the fuel levy were not adjusted by inflation in the May 2025 budget, it would have been necessary to raise an additional R4.1bn in 2025/26 either from other revenue sources, expenditure cuts or increasing debt.”
The minister argues for the court to dismiss the application, pointing to defects in its pleadings.
The case is set to be heard May 20.
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