‘A Crisis Like 2022’: AfriForum Calls for Emergency Fuel Levy Cut as Prices Set to Surge

South Africa is bracing for a sharp increase in fuel prices next monthand civil rights organisation AfriForum is calling on the government to step in.

The organisation has written to Finance Minister Enoch Godongwana, urging him to halt the planned increase in the general fuel levy and instead introduce a temporary tax cut to cushion consumers.

The Numbers

According to the latest data from the Central Energy Fund (CEF) for the first week of March:

• Petrol is showing an under-recovery of around R3.35 per litresignificantly worse than earlier estimates

• Diesel is under-recovering by roughly R5.80 per litre

If these trends continue, economists warn that petrol prices could rise far beyond R5.00 per litre.

The Cause

The looming increases are largely driven by the escalation of conflict involving Iran, which has dramatically increased oil prices.

Renewed tensions in the Middle East have triggered a global energy shock, with oil prices surging by more than 40% in recent weeks. Some analysts warn that prices could climb above $150 per barrel if the conflict intensifies.

The Precedent

AfriForum argues that government intervention is necessary to shield households and businesses.

In a letter to the finance minister, AfriForum’s head of public relations, Ernst van Zyl, pointed to measures introduced in 2022, when the government temporarily reduced the general fuel levy by R1.50 per litre during the global energy shock triggered by the war between Russia and Ukraine.

“AfriForum, alongside many economists, believe this to be the appropriate approach to cushion the impact of this latest crisis of a similar nature,” Van Zyl said.

The Ripple Effect

Van Zyl stressed that fuel price increases have far-reaching consequences throughout the economy.

“People often underestimate the effect of a fuel price hike on the price of goods. Raw materials need to be transported to be turned into intermediate goods. Intermediate goods need to be transported to be turned into final goods. Final goods need to be transported to be sold to consumers. Every step becomes more expensive if the fuel price increases.”

The Bottom Line

Petrol under-recovery: R3.35. Diesel: R5.80. Oil prices: surging. Consumers: already stretched.

AfriForum’s message to Godongwana: cut the levy, cushion the blow, and remember 2022.

The minister’s response will determine whether South Africans face the full force of the global oil shockor get some relief at the pump.