Cape Town – The National Treasury has defended its decision to increase the fuel levy in the 2025/26 Budget, announced by Finance Minister Enoch Godongwana.
Godongwana announced that the general fuel levy would rise by 16 cents for petrol and 15 cents for diesel from 4 June. T
According to SABC News, Deputy Director General on Tax and Financial Policy in the National Treasury, Chris Axelson said this is the first fuel levy adjustment since April 2021 and aligns with an expected inflation rate of around 4%.
He emphasised that the increase is modest compared to a potential VAT hike, aiming to generate R12 billion over three years, much less than the R75 billion expected from a VAT rise.
Axelson acknowledged the public’s concerns about the burden on consumers but maintained it was a necessary move.
Meanwhile, the EFF has criticised National Treasury for increasing the fuel levy after scrapping a proposed VAT hike, calling it a disguised tax swap.
During a joint parliamentary budget review, EFF MP Omphile Maotwe argued that the fuel levy hike would not raise substantial revenue, generating only R4 billion, EWN reported.
“We reject the fuel levy. When we rejected VAT in March, we never said it must be replaced with the fuel levy. They just went to convert VAT to a fuel levy. What is more painful is that the increase is only going to generate R4 billion – you are saying that yourself,” the report quoted Maotwe as saying.
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Compiled by Betha Madhomu
