The government is to be commended for biting the bullet and slashing the general fuel price levy to partially cushion consumers from what is still going to be a hefty fuel price increase in April.
The timing of the announcement just hours before the hikes — which would have seen the price of petrol soar by almost R6 per litre and that of diesel leap by more than R10 — points to the agonising conversations those in cabinet must have had behind the scenes about how the move would slash billions of rand from revenue.
- Leading business news as it happens: Subscribe to Business Day’s WhatsApp channel
According to Treasury estimates, nearly R100bn was collected from the general fuel levy in the 2025/26 financial year.
But there was no avoiding cutting the levy — it would have been the height of tone-deafness to ignore calls from the likes of Cosatu, Business Leadership South Africa, the DA and the Fuel Industry Association to protect households from the fallout of Donald Trump and Benjamin Netanyahu’s senseless war against Iran.
Failing to act would not only have driven transport costs higher for both private and public commuters; it would also have hurt consumers further as farmers and manufacturers passed the increase in production costs on to the retail price of food and other commodities.
The intervention represents a R6bn relief for the country and consumers, given that fuel is a core input across the entire value chain, supporting on-farm production, irrigation, harvesting, processing and logistics.
Not to be cynical, but the government’s move was also politically astute. Forcing consumers to absorb the fuel prices that would have come into effect at midnight with the prevailing fuel levies intact would have cost the ANC and its partners in the government of national unity dearly at local government elections later this year.
South Africans are already angry enough over the pothole-riddled roads in their cities and towns, the erratic water supply due to the failure to maintain infrastructure, and the rampant corruption across many spheres of government, including the police service.
It is, however, disappointing that while motorists and public transport users will benefit from the lower than anticipated increases in the price of petrol and diesel, millions of South Africans who still rely on illuminating paraffin for cooking, lighting and heating will still have to fork out R11 more a litre for the product.
That’s quite a sizable chunk out of the budgets of households that often rely just on social grants to survive from one month to the next.
It appears that, while scrambling for a solution for those South Africans that can still afford to drive cars or those that have jobs to commute to, the government overlooked the most vulnerable households that might now be forced to sit in darkness and bath in cold water because they simply cannot afford paraffin.
Also concerning is the fact that the government says the temporary fuel levy is an interim measure to stay in place until May 5. What will happen beyond that?
The sincere hope is that the powers that be are not naively banking on the blind hope that Trump and Netanyahu will soon listen to reason and end a war that many believe should never have started in the first place.
The government does deserve some sympathy — finance minister Godongwana now has sleepless nights ahead, figuring out where to find the money to plug the shortfall that will rise in the budget, jeopardising spending on health, education, infrastructure and social grants.
A good starting point would be to actively take a more forceful stance against wasteful expenditure by municipalities and the rampant corruption that has cost the country billions.
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.