BUDGET 2026 | Petrol levies to increase by 21c a litre

Finance minister Enoch Godongwana had bad news for motorists in his budget speech on Wednesday, confirming across-the-board increases to the fuel levy and carbon taxes.

He announced from April 1 the general levy for petrol will increase by 9c/l and 8c/l for diesel. The carbon fuel levy increases by 5c/l for petrol and 6c/l for diesel, and the Road Accident Fund (RAF) levy goes up by 7c/l.

He said the fuel levies are in line with inflation, and the increases are lower than last year. In 2025 the general fuel levy (GFL) increased by 16c/l for petrol and 15c/l for diesel.

For a litre of petrol from April, the GFL will increase to R4.10/l, the carbon fuel levy to 19c/l and the RAF levy to R2.25/l.

For diesel the GFL will be R3.93/l (up from R3.85), the carbon fuel levy will be 23c/l and the RAF levy will be R2.24/l.

The GFL is a tax charged on every litre of fuel sold. It is not ring-fenced for specific projects such as roads, but is used to fund general government expenditure. It is one of South Africa’s largest indirect tax sources and the state collects about R80bn a year through the fuel levy.

Gavin Kelly, CEO of the Road Freight Association, said allocated funding from the GFL has been reported to not being used for road infrastructure, but for other “more urgent” issues such as education, water and electricity and health requirements.

“Perhaps these are not (in themselves) incorrect, but the deterioration of general road networks not under the domain of Sanral has been noticeable,“ he said.

“Now is the time to sort out dilapidated roads through the fuel levy, not just to refer to ‘infrastructure projects’ at local and regional levels, or to note Sanral will maintain a very defined set of roads. Sanral cannot be responsible for all roads.”

The carbon tax is an environmental tax designed to help address greenhouse gas emissions and climate change. Introduced in 2019, the levy is added per litre of petrol and diesel sold, linking fuel consumption to the amount of carbon dioxide emissions it produces. While intended to support a transition to a low-carbon economy, the funds are not specifically reserved for green projects and are pooled into the general budget

Only the RAF levy is intended for a “dedicated fund” used to compensate victims of road accidents.

The government previously announced it would undertake a review of the fuel price formula to address high costs for households and businesses.

In October 2024, mineral and petroleum resources minister Gwede Mantashe said the underlying price of petrol and diesel should be about R14/l but levies were pushing retail prices above R20/l. He explained the levies were “distorting” the fuel price and said the government wanted to separate the components so the actual fuel price would be more transparent.

However, the promised reviews have not yet led to changes in the fuel price formula or significant price relief at the pumps.