The Minister of Finance, Enoch Godongwana indicated to Parliament on Thursday, 31 March that the general fuel levy will be cut by R1.50 per litre from next week Wednesday until the end of May.
However, with the temporary cut to the general fuel levy, petrol prices will rise by only around 23c to 31c.
Godongwana went on to say that the proposed reduction of the general fuel levy will be funded by the liquidation of a portion of the strategic crude oil reserves. “In this instance, the revenue foregone by the reduction in the levies will be recouped through a sale of strategic crude oil reserves, which are held by the Strategic Fuel Fund, which is a subsidiary of the Central Energy Fund. The sale would be required to raise around R6 billion,” Godongwana added.
Meanwhile, the escalation in oil prices is also due to the global economic recovery as COVID restrictions are eased, and the current conflict between Russia and Ukraine has placed significant pressure on domestic fuel prices and other commodities. Traders are also scrambling to secure oil supplies as Russia, is unable to deliver some of its oils due to shipping and banking restrictions
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