Finance Minister Enoch Godongwana has announced increases to the general fuel levy, raising it by R4.10 for petrol and R3.93 for diesel. Delivering his Budget Speech in Parliament on Wednesday, Godongwana said the increases are below inflation and will take effect from April 1.
For the 2026/27 financial year, taxes as a percentage of the pump price will increase. They will amount to 32.9% for petrol and 36% for diesel.
According to Godongwana, between 2015 and 2025, petrol carried an average tax burden of 33.4% of the pump price. While diesel averaged 35.7% over the same period.
Tax burden for petrol, diesel
“The tax burden for petrol peaked in 2015/16 at 40.9% and for diesel in 2020/21 at 45%. From 2022/23, the tax burden for petrol and diesel has remained below 35% due to higher fuel prices. And because fuel levies were not increased for three years,” said Godongwana.
The Road Accident Fund (RAF) levy will increase by 7 cents per litre to R2.25 a litre. While the customs and excise levy will remain unchanged at 4 cents per litre.
Carbon tax has also been adjusted. The headline rate increased from R296 to R308 per tonne of carbon dioxide on January 1.
In line with the Carbon Tax Act of 2019, Treasury has raised the carbon fuel levy by 19 cents a litre for petrol. It raised it by 23 cents a litre for diesel.
Aligned with expected inflation
“The combined increase in fuel levies from the general fuel levy, the carbon fuel levy and the RAF levy is in line with expected inflation.
“The carbon tax cost recovery quantum for the liquid fuels sector will be increased from 0.99c a litre to 1.29c a litre from January 1, 2016. This is to align with the increase of the headline carbon tax rate,” said Godongwana.
The budget review revealed that the country’s tax system has remained progressive and resilient despite a period of economic weakness.
“The 2026 Budget withdraws previously announced tax increases. And it adjusts various tax instruments for inflation to provide relief for taxpayers, assist small business and encourage savings,” he said.
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