Cape Town – South Africa’s R10 billion temporary fuel levy relief package is expected to cushion motorists against rising fuel costs but will do little to ease mounting financial pressure on fuel retailers, the South African Fuel Retailers Association (FRA) has warned.
Eyewitness News quoted FRA representative Henry van der Merwe as saying the relief would not directly improve retailers’ margins, despite offering motorists some respite from higher prices.
“There’s no real relief for fuel retailers because, as you know, we’re only getting a margin, our margin stays exactly the same,” Van der Merwe said.
The association also warned that declining fuel sales were putting pressure on filling stations, with some rural outlets reportedly closing at night to reduce operating costs. Van der Merwe cautioned that jobs were at risk as retailers struggled with deteriorating trading conditions.
Smaller reductions
The warning comes after Finance Minister Enoch Godongwana announced temporary reductions to the general fuel levy in his 2026 Medium-Term Budget Policy Statement on 21 October.
According to the government’s SAnews report, the levy will be reduced by R1.50 per litre for petrol and R3 per litre for diesel from 4 November to 1 December 2026. Smaller reductions of R1 per litre for petrol and R1.50 per litre for diesel will then apply until 5 January 2027.
Godongwana said the measures would provide R10 billion in support at a fiscal cost of R10 billion in foregone revenue.
The funding will come from money previously transferred to the Central Energy Fund, which will be returned to the National Revenue Fund to finance the relief.
Volatile international oil prices
However, the intervention may not fully offset the impact of volatile international oil prices and exchange-rate movements on local fuel costs.
The Mail & Guardian reported that the relief would offer consumers temporary savings, while its impact on transport fares and food prices would depend partly on whether businesses pass lower fuel costs on to customers.
Van der Merwe also pointed to uncertainty surrounding tensions around the Strait of Hormuz, a key global oil shipping route, warning that the anticipated decline in oil prices had become less certain.
The levy reductions are therefore expected to provide short-term assistance to motorists and businesses, but the retailers’ concerns highlight the limits of temporary tax relief in addressing the industry’s wider financial pressures.
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Compiled by Betha Madhomu
