On 31 March 2022, the Minister of Finance and the Minister of Mineral Resources and Energy jointly announced a temporary reduction in the general fuel levy of R1.50 per litre from Wednesday 6 April 2022 until 31 May 2022 to provide limited short-term relief to households from rising fuel prices following the Russia/Ukraine conflict. The relief was to be funded by a liquidation of a portion of the strategic crude oil reserves.
Since this announcement, the continuation of the Russia/Ukraine conflict, supply chain bottle-necks and a tightening of global monetary policy have led to further unfavourable changes in the two key drivers of the regulated petrol price, the exchange rate and the global oil price. These events have led to even larger increases in fuel prices compared to a few months ago when the temporary fuel levy relief was introduced. The withdrawal of the temporary relief in the general fuel levy would contribute to an increase in petrol prices of close to R4 per litre, and push prices of 95 octane unleaded petrol (ULP) to above R25 per litre, an increase of just under 20 per cent with effect 1 June 2022.
Due to this significant monthly price increase, the Minister of Finance has submitted a letter to the Speaker of the National Assembly, requesting the tabling of a two-month proposal for the extension of the reduction in the general fuel levy. This will take the form of a continuation of the relief of R1.50 per litre for the first month, from 1 June 2022 to 6 July 2022, and then a downward adjustment to the relief for the second month to 75c per litre from 7 July 2022 to 2 August 2022. The temporary relief will be withdrawn from 3 August 2022.
We will keep you informed of developments in this regard.
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