South Africa Cuts Fuel Tax Amid Record Price Hikes Driven by Middle East Conflict
South Africa Cuts Fuel Tax Amid Record Price Hikes Driven by Middle East Conflict
South Africa Cuts Fuel Tax Amid Record Price Hikes Driven by Middle East Conflict
South Africa on Tuesday announced a temporary reduction in its fuel tax to mitigate soaring global oil prices caused by the ongoing Iran war, even as pump prices surged in one of the steepest increases in recent history.
The government said the general fuel levy would be lowered by three rand ($0.18) per litre for one month, in a bid to provide relief to consumers. Despite this, diesel prices are set to jump more than seven rand per litre—a 40 percent increase—while petrol will rise about 15 percent. Paraffin, a key source of energy for low-income households, will surge by 93 percent.
Finance Minister Enoch Godongwana and Petroleum Minister, in a joint statement, said the measure will cost around six billion rand ($352 million) in foregone revenue but is intended to be fiscally neutral, with losses offset elsewhere in the budget. Godongwana, however, acknowledged uncertainty over how the shortfall would be managed, telling journalists, “I don’t know where I’m going to find this money for now.”
The government also indicated that work is ongoing on a broader package of interventions to support households and critical sectors of the economy.
Oil prices have escalated sharply since the US-Israeli war against Iran disrupted tanker shipping through the Strait of Hormuz, raising fears of global shortages and sending shockwaves through international markets.
Unlike some regional peers, South Africa has largely avoided widespread fuel queues, though a few stations reported temporary shortages as motorists rushed to fill up ahead of the price hikes. Minibus taxi operators, who provide the country’s main form of public transport, have warned that fares may increase in response.
AFP
South Africa Cuts Fuel Tax Amid Record Price Hikes Driven by Middle East Conflict
