R10 billion petrol and diesel price relief on the cards for South Africa

The government is working on a plan to provide temporary fuel price relief to South Africans as petrol and diesel prices continue to rise.

However, unlike the relief implemented between April and June, this plan will not involve tax cuts or revenue losses.

The Bureau for Economic Research’s chief economist, Lisette Ijssel de Schepper, explained that the latest relief plan is in response to elevated fuel prices. 

Petrol and diesel prices rose to R30.28 and R33.29 per litre in October 2026, with further increases expected in November.

To provide relief to motorists and other fuel users in South Africa, the government is developing a plan to allocate R10 billion in relief.

“The plan, currently awaiting final parliamentary approval, is to unlock the R10 billion that the Treasury has transferred to the Equalisation Fund, overseen by the Department of Mineral and Petroleum Resources (DMPR),” Ijssel de Schepper said. 

She emphasised that this amount is separate from the R17 billion “temporary holiday” on the general fuel levy granted between April and June.

In those months, the National Treasury temporarily reduced the general fuel levy as South Africans were facing one of the largest fuel price increases in the country’s history.

This relief cost the Treasury R17 billion by essentially sacrificing the revenue it would have collected from the fuel levy in those months.

However, Ijssel de Schepper explained that the relief now on the table does not involve cutting taxes or losing revenue.

Instead, this plan involves a direct, once-off cash injection of state funds explicitly earmarked to soften the impact of high international crude oil import costs at the pump. 

In simple terms, the government wants to transfer R10 billion in existing state money to a fund managed by the DMPR.

This money will serve as a financial buffer to absorb the shock of rising global oil prices, ensuring that the full price increase is not passed directly on to consumers.

In effect, this will stabilise petrol and diesel prices at the pump for motorists.

Relief for motorists

“So, while the fiscal mechanism may differ, providing relief through the Equalisation Fund costs the government the same amount,” Ijssel de Schepper explained.

At the same time, she said this would enable better planning and upfront management of consumer expectations.

“With petrol already costing over R30/litre and further increases possible in November, the R10 billion could be used to cushion consumers against further fuel-price increases over the festive season,” she said.

Ijssel de Schepper noted that this depends on the final design and timing of the government’s planned intervention.

On Wednesday, 14 October, the Central Energy Fund (CEF) projected an under-recovery in petrol and diesel prices.

The CEF projects an under-recovery of R2.27 per litre for Petrol 95 and R1.37 per litre for Diesel 0.05%.

With petrol and diesel currently priced at R30.25 and R31.95, respectively, these under-recoveries would push fuel prices to new record highs.

These projected under-recoveries are largely due to high global oil prices.

Ijssel de Schepper explained that, despite the resumption of shipping through the Strait of Hormuz, Brent crude oil prices have remained above $100 per barrel for the past month. 

“While oil continues to flow through the strait, persistent attacks on commercial vessels and the risk of a renewed escalation in the conflict have kept prices elevated,” she said.

The rand has remained resilient in the face of this continued pressure, ending the week 0.7% stronger against the dollar. 

The local currency also appreciated by 0.7% and 0.5% against the euro and British pound, respectively.