South Africa will temporarily cut its fuel levy for one month in a bid to ease rising pump prices, as pressure mounts on the government to shield consumers from the economic fallout of the Iran war.
In a joint statement on Tuesday, the finance and petroleum ministries said the general fuel levy will be reduced by 3 rand per litre for April. The move will lower the levy to 1.10 rand per litre for petrol and 0.93 rand for diesel.
The government said it would offset the estimated 6 billion rand ($350 million) revenue shortfall through alternative measures.
Despite the intervention, fuel prices are still expected to rise sharply next month, with petrol projected to increase by about 15% and wholesale diesel by as much as 40%.
Authorities said they are working on a broader support package targeting households and key sectors of the economy, as the country grapples with rising global energy costs.
Finance Minister Enoch Godongwana said the government would continue monitoring developments in the Middle East and could extend relief if the conflict persists.
“I don’t think it can be sustained beyond June,” he told reporters, signaling that any additional support would likely be short-term.
The move echoes a similar intervention in 2022, when South Africa reduced fuel levies following the outbreak of the Russia-Ukraine war. That relief was gradually phased out after several months.
South Africa’s central bank has already warned of mounting inflation risks, forecasting fuel inflation to exceed 18% in the second quarter.
The rand has also come under pressure, weakening nearly 7% against the U.S. dollar since U.S. and Israeli strikes on Iran began in late February, further driving up import costs.
As a net importer of petroleum products, Africa’s most industrialized economy remains highly vulnerable to global energy price shocks.
Fuel prices in South Africa are adjusted monthly based on global crude oil prices, exchange rates and domestic taxes, with new rates taking effect on the first Wednesday of each month.