South Africa will reinstate a fuel tax reduction for two months, at an estimated cost of 10 billion rand in revenue, Finance Minister Enoch Godongwana announced on Wednesday, 21 October, during the presentation of the mid-term budget to Parliament in Cape Town.
The measure aims to cushion the surge in pump prices for households and businesses. The country imports most of its fuel and remains exposed to oil price movements, whose volatility has increased with the conflict in the Middle East, according to Reuters.
The Treasury now forecasts a consolidated budget deficit equivalent to 3.9% of gross domestic product in 2026/27, compared with 4.0% in the February budget. Gross public debt has levelled off at 78.4% of GDP in 2025/26, a first in nearly twenty years, according to the minister.
The government had already reduced fuel levies between April and June. That first measure cost 17.2 billion rand in forgone revenue, according to the Treasury, before being gradually withdrawn from 1 July.
The new announcement sets the duration of the relief and its budgetary cost. The speech does not, at this stage, quantify the reduction per litre, a figure needed to measure its effect on pump prices.