Petrol hit a record R30 a litre this week, and the government’s response has been to ask drivers not to panic-buy and to “make every kilometre count”, BusinessTech reports.
The Department of Mineral and Petroleum Resources announced on Monday that petrol would rise by R3.12 and R3.33 a litre from Wednesday, 7 October, and diesel by R2.84 and R3.24 a litre. In a public notice, the government said panic-buying could cause unnecessary supply shortages and urged motorists to drive more efficiently: accelerating gradually, braking gently and keeping a steady speed, avoiding excessive speeding, switching off the engine instead of idling for long periods, combining errands into one trip, keeping vehicles serviced, limiting air conditioning, and carpooling, walking or cycling where practical.
Motorists reacted with disbelief, remarking that the state should be working to lower fuel prices rather than telling South Africans to drive better. And the pressure is not over: with the November review period starting, the Central Energy Fund (CEF) is already pointing to another under-recovery (the gap between what fuel costs and what the pump price recovers) of about R4 a litre.
Why tax relief is unlikely
Various sectors asked for fuel levies to be cut, as they were in April 2026. National Treasury has made clear that this does not come free: the April intervention set the budget back by more than R17 billion, which has to be recovered elsewhere, and Finance Minister Enoch Godongwana has said the budget cannot shield motorists from every external price shock.
Sanisha Packirisamy, group economist at Momentum, says Treasury has no easy options. It must protect immediate tax revenue, but rising fuel costs erode the broader economy that generates it. “The economic case for fuel relief, to offset the dent to purchasing power, is compelling,” she said. “October’s record price spikes, on top of previous steep increases, act as an immediate squeeze on household budgets and business margins.”
Higher diesel costs, she noted, filter quickly into freight, agricultural and wider operating costs. “If these supply-side pressures feed into secondary or underlying inflation pressures, the South African Reserve Bank may keep interest rates higher for longer, further dampening growth and consumer spending,” she said. A severe downturn could cost the fiscus more in lost personal, corporate and VAT collections than a fuel levy cut would, she added.
Relief carries a fiscal price too. “The government’s previous relief package partly relied on windfall revenues, higher commodity prices, that may no longer exist,” Packirisamy said, and absorbing high fuel prices through extra borrowing “risks driving up government bond yields and weakening the rand, while cutting public spending elsewhere carries its own growth and socio-economic penalties”. She said withholding relief is hard to defend to strapped consumers, “yet repeated extensions create an unrealistic expectation that the government will absorb every external energy shock”, and that support for vulnerable groups may be needed if the shock threatens lasting damage, provided Treasury spells out both the revenue cost of intervening and the risk of not doing so.
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