Fuel levy cut offers relief as agriculture flags deeper risks
Government has announced a temporary R3 per litre reduction in the general fuel levy for April 2026, as rising global oil prices driven by conflict in the Middle East place pressure on domestic fuel costs.
Source: ©Phanuwat Nandee via 123RF
The measure, introduced by Finance Minister Enoch Godongwana in consultation with Mineral and Petroleum Resources Minister Gwede Mantashe, will apply from 1 April to 5 May 2026.
Short-term relief to ease inflation pressures
The levy reduction will lower the petrol levy from R4.10 to R1.10 per litre and diesel from R3.93 to R0.93 per litre for one month.
National Treasury estimates the intervention will result in R6bn in foregone revenue, with plans to recoup the amount within the existing fiscal framework.
Government said the decision aims to cushion the impact of rising fuel costs on transport and food prices, while maintaining stability in fuel supply.
Authorities also moved to reassure the public that national fuel stocks remain sufficient, attributing recent shortages in some areas to panic buying and localised distribution challenges.
Agriculture sector welcomes relief, but flags risks
Industry bodies AgriSA and Agbiz said the intervention provides timely support, particularly given the sector’s reliance on fuel across the value chain.
“The decision to reduce the fuel levy by R3 per litre provides important and timely relief to both consumers and producers in a context of heightened global energy market volatility,” the organisations said in a joint statement.
Fuel typically accounts for between 12% and 18% of farming input costs, supporting activities such as production, irrigation, harvesting and logistics.
The organisations said the measure could help limit further food price increases in the short term.
Calls for broader support measures
However, AgriSA and Agbiz warned that the sector continues to face a combination of rising input costs, supply constraints and operational uncertainty.
“In addition to fuel, other major inputs such as fertiliser, often accounting for up to 35% to 50% of production costs, are also under upward pressure due to global supply disruptions and geopolitical risks,” they said.
They emphasised that the fuel levy cut should form part of a broader response to stabilise the agricultural system.
Proposed measures include:
• More frequent fuel price reviews during periods of volatility
• Greater transparency on national fuel stock levels
• Consideration of a temporary reduction in the Road Accident Fund levy
• Extending the diesel rebate for primary producers to 100%
“These measures are not intended to increase costs to the sector, but rather to ensure that pricing reflects underlying conditions more accurately, thereby reducing incentives for panic buying or withholding supply,” the organisations said.
Further interventions under consideration
Government confirmed that additional support measures are being developed, alongside a broader review of the fuel pricing framework.
The agricultural sector said this process will be critical to addressing structural inefficiencies and ensuring the system remains responsive to key industries such as food production and logistics.