South African Finance Minister Enoch Godongwana has announced a second round of temporary relief for motorists and commuters struggling with surging fuel prices. The government fuel levy on diesel will be reduced by 3 rand ($0.18) a liter, and by 1.50 rand on gasoline, from Nov. 4 until Dec. 1.
The concession will then be extended until Jan. 5 at a lower rate, with the levy reduction trimmed to 1.50 rand a liter on diesel and 1 rand on gasoline. Godongwana made the announcement while presenting his medium-term budget policy statement to lawmakers in Cape Town on Wednesday. "We are aware of the pressure that rising fuel prices are placing on households and businesses," he said. "This intervention will help ease cost-of-living pressures without compromising the sustainability of the budget."
The wars in Ukraine and Iran, along with disruption of traffic through the Strait of Hormuz, a key maritime chokepoint, have pushed the cost of oil above $100 a barrel, with knock-on effects on refined fuel worldwide. Importers like South Africa have been particularly hard hit, with gasoline prices reaching an all-time record.
The fuel levy was previously reduced from April to June. The current relief will cost the government 10 billion rand in foregone revenue and will be funded by reallocating money that had been transferred to the Central Energy Fund, Godongwana said. Nations including Kenya and Nigeria have provided similar relief to their citizens.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing