SA has room for two more months of fuel relief, Citi Says

Key topics:South Africa may extend fuel-tax cut by up to two monthsFiscal space seen to cost R10–12bn amid oil price surgeIran conflict drives fuel prices and inflation higher in SA.Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox every morning on weekdays. Register here.Support South Africa's bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here..By Ntando Thukwana.South Africa has enough fiscal space to extend a fuel-tax cut by two months to cushion consumers from an oil shock triggered by the Iran war, Citigroup Inc. said.The relief would likely cost the government between 10 billion rand ($609 million) and 12 billion rand, Gina Schoeman, the bank’s country economist, said in Johannesburg on Thursday..“We can see a staggered reduction of the fuel price levy for at least another month, if not another two,” Schoeman said. “That is certainly feasible in terms of fiscal space,” she said, citing prudent spending, an expected revenue windfall from mining taxes, and the National Treasury’s ability to tap contingency reserves..Read more:.The blind cost of administered fuel prices: Ivo Vegter.South Africa’s Finance Minister Enoch Godongwana joined counterparts from other oil-importing nations from Zambia to Kenya in offering relief to consumers after crude prices surged following the near closure of the Strait of Hormuz amid the US-Israel war with Iran. He cut the fuel levy by 3 rand per liter for both gasoline and diesel this month. Oil prices have risen by almost a third since the conflict began on Feb. 28.The Treasury said it would forgo 6 billion rand in revenue because of the measure, offsetting the shortfall within the fiscal framework approved in the 2026 budget. It is also working on a broader package of measures to support households.The oil price surge is likely to push up inflation. Consumer prices rose 3% in February, in line with the central bank’s target, and are expected to peak at 4.3% in April.The latest data show petrol prices are building an under-recovery of as much as 2.80 rand per liter, and diesel 8.53 rand per liter..Read more:.Justice Malala: Africa’s energy vulnerability exposed as war shakes fuel markets.Central bank Governor Lesetja Kganyago on Wednesday said policymakers should respond to the inflation shock from the Iran war by ensuring it remains temporary rather than entrenched. .© 2026 Bloomberg L.P.

SA has room for two more months of fuel relief, Citi Says

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