Finance Minister Enoch Godongwana has discussed plans regarding the long-term goal of removing fuel levies in South Africa. The change would eliminate over R6 per litre at the pump, though Treasury faces an R80 billion revenue gap. Temporary reductions take effect on November 4, 2026, amid record-high prices.
South African motorists enduring record fuel expenses could see significant long-term relief if the National Treasury executes its ambition to dismantle the country’s fuel tax regime. Speaking on 702, Finance Minister Enoch Godongwana confirmed that the government’s ultimate objective is to permanently remove fuel levies on petrol, a move that would strip more than R6 per litre from retail pump prices.
The R80 Billion Revenue Shortfall and the Road Accident Fund Challenge
The path to permanent relief involves untangling two major components that make up the cost of every litre. The first is the Road Accident Fund levy, which adds R2.25 per litre to both petrol and diesel. Godongwana noted that just removing the Road Accident Fund, you’ll realise a major decrease in the price of fuel, but cautioned that doing so requires adjusting the fund’s insurance model so it no longer relies on fuel sales. Together, the main levies add more than R6 to the cost of every litre of petrol.
Finance Minister Enoch Godongwana said South Africa's fuel levy system needs to change, with the long-term goal of removing levies on petrol, a move that could bring significant relief to motorists but would leave the government facing a major revenue shortfall.…
We’ve got to find a way of phasing it out. But in doing so, we will be losing about R80 billion. How are we going to close that gap? That’s a discussion we probably will have.
Finance Minister Enoch Godongwana
The second hurdle is the General Fuel Levy, which currently stands at R4.10 per litre for petrol and R3.93 for diesel. Unlike its original 1983 mandate to fund the maintenance and expansion of South Africa’s road network, the revenue now goes into the state’s general account without ring-fencing. Economists have noted that replacing that R80 billion without raising income taxes or accelerating government borrowing presents a formidable fiscal dilemma. Hannah Marais, Southern Africa chief economist at Deloitte Africa, recently explained that tax cuts come with a huge fiscal cost requiring additional borrowing or spending cuts, while Sanisha Packirisamy, group economist at Momentum, added that absorbing high energy prices through extra borrowing risks driving up government bond yields and weakening the rand.
Temporary Relief Measures and Escalating Pump Prices for November
While long-term restructuring remains under discussion, Treasury implemented temporary fuel levy reductions to ease immediate pressures. From November 4 until December 1, 2026, the General Fuel Levy drops by R1.50 per litre for petrol and R3.00 per litre for diesel. From December 2 until January 5, 2027, that relief scales back to R1.00 per litre for petrol and R1.50 for diesel, funded by returning R10 billion transferred to the Central Energy Fund back to the National Revenue Fund.
Photo: IOL
Yet those savings face erosion from international oil market pressures driven by geopolitical conflict in the Middle East. Central Energy Fund data points to underlying price hikes of R1.16 per litre for petrol and R1.40 for diesel, meaning motorists will still navigate pump prices hovering near historic highs around R29.82 per litre.
Automotive Alternatives and Autogas Conversions Gain Traction
Faced with persistent energy costs, businesses and motorists are examining alternative mobility solutions. The Automotive Remanufacturers’ Association is promoting LPG Autogas, positioning the alternative fuel—priced between R11.30 and R15.90 per litre—as a practical buffer. ARA national director Attie Serfontein noted that the option offers motorists and businesses another way to manage costs while reducing emissions. Fleet operators are accelerating conversions, and manufacturers such as DFSK South Africa have introduced approved LPG kits for commercial vehicles to help manage operating overheads without forcing owners to buy entirely new vehicles. Isinkwe Energies managing director Kyle Hartley stated that LPG prices are not expected to fluctuate as sharply as petrol and diesel prices.
Minister of Finance Mr. Enoch Godongwana tables the 2026 MTBPS_2
Omar El Sayed is Archyde’s World Editor, focused on international affairs, diplomacy, conflict, and cross-border political developments. He brings a global newsroom perspective to complex events and helps readers understand how regional stories connect to wider geopolitical shifts.
