Cape Town – South Africa is considering the permanent removal of fuel levies that account for about R6.54 per litre of petrol, but Finance Minister Enoch Godongwana has warned that replacing the lost government revenue will be a major challenge.
According to Daily Investor, Godongwana told radio station 702 that National Treasury remained committed to reviewing fuel levies, including the General Fuel Levy (GFL) and the Road Accident Fund (RAF) levy.
“The long-term plan is to remove levies on petrol,” Godongwana said, adding that removing the RAF levy alone could significantly lower pump prices.
However, the minister acknowledged the fiscal implications of scrapping the taxes. The GFL generates about R80 billion annually for the national fiscus, making its removal dependent on finding alternative sources of revenue.
“We’ve got to find a way of phasing it out,” Godongwana said of the levy. “In doing so, we will lose R80 billion in revenue and then have to find a way to close that gap.”
MyBroadband reported that the proposed removal of fuel taxes could save motorists approximately R6.58 per litre, although the precise saving would depend on which levies were scrapped.
The discussion comes as motorists face record fuel prices and pressure on household budgets. In its 21 October Medium-Term Budget Policy Statement, the government announced temporary fuel levy relief from 4 November 2026 to 5 January 2027.
According to SAnews, the GFL reduction will initially amount to R1.50 per litre for petrol and R3 per litre for diesel, before easing to R1 and R1.50 respectively for the remainder of the relief period.
The temporary intervention is expected to provide R10 billion in support to households and businesses.
However, permanently removing fuel levies remains a longer-term proposal, rather than an approved price cut. As Godongwana has previously warned, sustained fuel-price relief funded through the national budget could shift costs to other taxpayers or increase government borrowing.
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Compiled by Betha Madhomu
