South Africa has temporarily lowered its fuel tax for one month in a bid to cushion citizens from the impact of soaring global oil prices caused by the ongoing Iran war. The general fuel levy will drop by three rand per litre, according to a joint statement from the finance and petroleum ministers.
Despite the tax relief, sel prices will increase by over seven rand per litre, a 40 percent surge, while petrol will rise about 15 percent. Paraffin, used widely for cooking, heating, and lighting by low-income households, will experience a sharp 93 percent increase.
The government expects the measure to cost approximately six billion rand ($352 million) in foregone revenue but said the losses will be offset elsewhere to remain fiscally neutral. Finance Minister Enoch Godongwana admitted that how the shortfall would be addressed was not immediately clear.
The spike in oil prices follows disruptions in global tanker shipping through the Strait of Hormuz due to the US-Israeli conflict with Iran. While South Africa has largely avoided widespread fuel queues, some stations reported shortages as motorists rushed to fill up before the increases.
Minibus taxis, a primary mode of public transport, have warned they may hike fares in response to the rising sel prices. The government indicated that broader measures are being considered to support households and critical sectors of the economy.
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