South Africa cuts fuel levy by R3 per litre to ease agricultural costs

The escalation of conflict in the Middle East has increased risks to global energy markets, placing upward pressure on domestic fuel prices in South Africa. Data from the Central Energy Fund Group points to high fuel price increases from April 2026. In response, consultations between the National Treasury and the Department of Mineral and Petroleum Resources have resulted in a short-term relief package aimed at stabilising costs while maintaining fuel supply.

The government has introduced a temporary reduction in the general fuel levy of R3 per litre (US$0.16) from 1 April to 5 May 2026. This reduces the levy on petrol from R4.10 per litre (US$0.22) to R1.10 per litre (US$0.06), and on diesel from R3.93 per litre (US$0.21) to R0.93 per litre (US$0.05) for one month. The measure is expected to result in foregone tax revenue of approximately R6 billion (US$323 million), with the relief to be reviewed monthly over the following two months.

The government stated that fuel supply remains sufficient, with reported shortages linked to localised logistical challenges and panic buying rather than national stock constraints. Consumers and businesses have been encouraged to avoid stockpiling.

A second phase of measures includes a review of fuel pricing over the medium term and the development of additional support mechanisms for households and key sectors.

AgriSA and Agbiz have welcomed the temporary reduction, noting its impact across the agricultural value chain. Fuel is a core input in production, irrigation, harvesting, processing, and logistics, accounting for between 12 per cent and 18 per cent of production costs. The organisations stated that the intervention provides R6 billion (US$323 million) in relief and may help to limit further increases in food and transport inflation.

However, they highlighted that the sector is also facing supply constraints and operational uncertainty at the farm level, particularly ahead of winter and summer grain production periods. These pressures are occurring in a low-margin environment with elevated input costs.

Fertiliser costs, accounting for between 35 per cent and 50 per cent of production costs, are also increasing due to global supply disruptions and geopolitical risks.

AgriSA and Agbiz have called for additional measures, including greater flexibility in fuel price adjustments, increased transparency on national fuel stocks, consideration of a temporary reduction in the Road Accident Fund levy, and extending the diesel rebate for primary users to 100 per cent.

The organisations noted that further policy development will be required to address structural challenges and ensure the fuel pricing system remains aligned with the needs of the agricultural sector.

Source : freshplaza

South Africa cuts fuel levy by R3 per litre to ease agricultural costs

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