South African consumers may have welcomed the cancellation of the proposed VAT increase, but the trade off in yesterday’s Budget 3.0 speech is an increase in the fuel levy after a three-year freeze and this has raised alarms.
The fuel levy increase proposed by Finance Minister Enoch Godongwana, proposes raising the General Fuel Levy (GFL) by 16 cents per litre for petrol to R4.01 and 15 cents for diesel to R3.85, effective 4 June 2025.
“Should the budget be approved this will be a blow to South African consumers and businesses. This price hike offsets much of the anticipated June price cuts of ~23 cents for petrol and ~50 cents for diesel, as projected by the Central Energy Fund (CEF),” comments Lebo Ramolahloane, National Vice Chairperson of SAPRA
He says with Brent crude prices rebounding since the U.S.-China tariff war pause on May 12, 2025, motorists face the prospect of higher pump prices, undermining recent relief.
“The levy increase adds to inflationary pressures in our already fragile economy, where growth forecasts aren’t looking promising and are also dependent on the outcomes from trade talks that will take place between SA and USA.”
Ramolahloane says households and all businesses will in fact feel it in their pockets. “The 16/15c/l increase impacts the positive momentum that was being enjoyed from the previous 3 consecutive decreases. Should there be a decrease come 4 June 2025, it will be minimal due to the proposed increase on the General Fuel Levy,” he concludes.