South African Finance Minister Enoch Godongwana announced on Wednesday the allocation of approximately $609 million for a temporary relief of the fuel tax. The government is taking these steps to protect consumers from rising fuel prices while controlling the national debt.
Godongwana stated, while presenting the Medium-Term Budget Policy Statement for 2026, that higher-than-expected tax revenue created the opportunity for such an intervention. The Ministry of Finance collected approximately $3.3 billion more than previously projected.
The government plans to reduce the total fuel levy by approximately 18 US cents per liter of diesel and 9 US cents per gallon of petrol from November 4 to December 1, followed by smaller cuts until January 5, 2027.
The Ministry of Finance expects the primary budget deficit to narrow to 3.9% of gross domestic product (GDP) in the current fiscal year, which is lower than the February forecast of 4%. However, economic growth for 2026 has been revised down from 1.6% to 1.2%.
The national debt stabilized at 78.4% of GDP in the 2025/26 fiscal year, although debt servicing costs continue to constrain public spending.
To strengthen fiscal discipline, the government intends to introduce fiscal anchor legislation in Parliament in 2027. Furthermore, it has identified additional savings of $2.32 billion over the medium-term expenditure period through the reduction of low-priority programs, decreased administrative duplication, and anti-fraud measures for social grants.
The government asserts that this temporary relief will help ease the burden on households and businesses while maintaining a sustainable path for public finances.