South Africa cuts fuel levy as debt stabilises

South Africa will reduce its fuel levy by R3 per litre for diesel and R1.50 per litre for petrol from November 4 until December 1, Finance Minister Enoch Godongwana said in his Medium-Term Budget Policy Statement on Wednesday, with smaller cuts continuing until January 5, 2027. The package provides R10 billion in support at a cost of R10 billion in foregone revenue, funded by returning R10 billion from the Central Energy Fund to the National Revenue Fund, and the contingency reserve rises to R10 billion for El Niño drought and energy price risks.

The statement put debt at 78.4 percent of GDP in 2025/26, stabilised for the first time in nearly two decades and projected to fall to 76.6 percent by 2030, with the deficit narrowing to 4.3 percent of GDP this year against 4.5 percent forecast in February after gross tax revenue was revised up by R17.1 billion, helped by mining receipts. Growth for 2026 was cut to 1.2 percent from 1.6 percent, and Godongwana proposed a principle based fiscal anchor in legislation, requiring each administration to commit to its own fiscal objectives and explain deviations to Parliament.