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Godongwana cuts fuel levy and lowers 2026 growth forecast

Published

Finance Minister Enoch Godongwana told Parliament that Treasury now expects growth of 1.2% in 2026, down from 1.6%. He also announced a temporary fuel levy cut costing R10 billion, and said the deficit will narrow to 4.3% of GDP.

The fuel levy will fall by R3 per litre for diesel and R1.50 per litre for petrol from 4 November to 1 December 2026. After that, a lower relief of R1.50 per litre for diesel and R1 per litre for petrol will last until 5 January 2027. Godongwana said the measures will help ease cost of living pressures without compromising the sustainability of the budget.

Treasury expects the deficit to reach 4.3% of GDP this year, down from 4.5% at the time of the Budget. Growth should reach 1.6% in 2027 and 2% by 2029. Revenue overruns of R17 billion came from higher precious metal prices. Godongwana said these commodity gains should fade over the medium term.

Government also released draft fiscal anchor legislation and published an amended Municipal Finance Management Act for public comment. Treasury said the fiscal anchor legislation will be gazetted for public comment this week.

Treasury Director General Duncan Pieterse said fuel levy relief helps households and consumption and lowers inflation, if done in a fiscally neutral way. On further action if oil price pressure continues, he said: "That is something we will continue to evaluate as the (Middle East) conflict continues."

Key facts

Who
Enoch Godongwana (Finance Minister, delivered the Midterm Budget Policy Statement in Parliament); National Treasury (government department that said the fiscal performance improved); South African Revenue Service (collected extra tax revenue due to higher precious metal prices); Duncan Pieterse (Director General of National Treasury)
What
Treasury cut the 2026 growth forecast to 1.2% from 1.6%, with growth projected at 1.6% in 2027 and 2% by 2029, while revenue overruns of R17 billion from higher commodity prices improved the fiscal position.
When
21 October 2026
Where
South Africa
Status
Reported

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