Motorists will be getting some relief at the pumps.
Finance minister Enoch Godongwana announced in his medium-term budget policy statement on Wednesday that the government will again provide temporary relief from record fuel prices. The fuel levy will be cut by R3 a litre for diesel and R1.50 a litre for petrol from November 4 until December 1. Thereafter, the relief will continue at a lower amount until January 5: R1.50 a litre off diesel and R1 a litre off petrol.
“We are aware of the pressure that rising fuel prices are placing on households and businesses,” he said. “These measures will provide R10bn in support, at a fiscal cost of R10bn in foregone revenue.”
Petrol and diesel rose to R30.28 and R33.29 a litre in October, a surge of nearly 50% and 70% respectively as the war in the Middle East fed into domestic prices. Godongwana said rebuilt fiscal buffers have left the government “in a stronger position to respond”.
The announcement follows similar relief granted in April, May and June, when the general fuel levy was cut by up to R3 a litre for petrol and R3.93 for diesel. While it was initially estimated that the move would cost R17.2bn, it ended up costing between R22bn and R23bn, National Treasury director-general Duncan Pieterse told journalists. The Treasury doesn’t expect the latest measure to exceed R10bn, he added.
The money comes from a revenue overrun in the 2025/2026 financial year. At the time of the February budget, the Treasury put R10bn of it into a special appropriation for the state-owned Central Energy Fund (CEF). The CEF’s equalisation fund is used to smooth out swings in the basic fuel price.
“We have agreed with the CEF that they are going to surrender that R10bn into the National Revenue Fund and that R10bn will then be deployed for fuel levy relief,” Pieterse said. Once it is back in the National Revenue Fund — the government’s main account — it counts as revenue this year and pays for the levy cut.
“In our view, fuel levy relief is positive for households, it’s positive for consumption, it’s positive for inflation and it’s positive for the economy,” he said. But, he added, the government cannot commit to additional support. “The question is whether we can provide that relief in a fiscally neutral manner. If there is no space in the fiscal space to do so and fuel levy relief is going to compromise our broader fiscal targets and the fiscal trajectory we are on, then it becomes obviously very difficult to consider,” he said.
Here are the other highlights from the MTBPS.
Growth downgraded
The economy is expected to expand 1.2% this year, revised down from the 1.6% forecast in the main February budget, but up against the 1.1% of 2025, with the Middle East conflict weighing on the economy due to higher fuel prices, financial market volatility and weaker consumer and business confidence.
It could have been worse, but a “lower inflation target, a narrower deficit, stabilised debt and a lower risk premium have left the economy better placed to absorb external shocks”.
However, the government is optimistic that growth will begin accelerating from 2027, to 1.6%, and reach 2% by 2029 as “reforms make additional progress, policy certainty improves, infrastructure spending rises and borrowing costs decline”.
Inflation to ease
Headline inflation is seen returning towards the 3% target by 2029, after rising from 3% in February to as high as 5% in June. The Treasury expects it to average 4.4% this year and ease to 3.1% in 2029, on the expectation that the shock to global energy prices will fade.
A revenue windfall
Government revenue for the 2026/2027 financial year is running R54.1bn higher than forecast in February. Tax accounts for R17.1bn of that. The rest comes from non-tax revenue and other receipts, including the R10bn returning from the CEF and surpluses surrendered by public entities.
Provisional corporate tax collections grew by 17.4% over the first six months compared with the same period in 2025/2026, which the Treasury said reflects “broad-based growth”. The mining sector was the largest contributor: June 2026 collections were R10.9bn higher than a year earlier, thanks to high platinum group metal and gold prices. Strong corporate profits also supported dividends tax collections.
Personal income tax grew mainly because of salary increases in the finance and public sectors, despite lower employment. VAT collections benefited from resilient household spending and lower refunds, which offset weaker import VAT. The fuel levy, by contrast, was weighed down by the temporary relief between April and June.
Primary surplus ahead of schedule
The primary surplus — revenue minus non-interest spending — is ahead of February’s projections. It reached R80.8bn, or 1% of GDP, in 2025/2026, against an estimate of 0.8%, and is expected to rise to 1.7% this year and 2.9% in 2029/2030.
In 2023/2024, South Africa achieved its first primary surplus in 15 years. Since then, the rising surplus has helped slow the growth in debt and contain debt service costs, according to the Treasury. It is also helping narrow the main budget deficit from 4.3% of GDP in 2025/2026 to 2.5% in 2029/2030.
Debt stabilised at 78.4% of GDP in 2025/2026 and is now expected to decline to 76.6% by 2029/2030. The government is also increasing the contingency reserve to R10bn in 2026/2027 as a buffer for drought and the El Niño response, as well as potential further energy price spikes.
SRD grant stays — for now
The social relief of distress (SRD) grant will be extended for another year while work continues on linking it to labour market activation, skills development and enterprise support. The grant has been factored into the baseline permanently, Pieterse told journalists.
Its future will be decided by the question of “what do we want the grant to do?”, he said. That means deciding whether it should deal with issues like food poverty or whether it needs some conditionality, such as being used as “a job seeker’s grant”.
A Supreme Court of Appeal judgment on the grant’s rules is pending. The Treasury estimates that an adverse ruling could raise the annual cost from about R36bn to R74bn.
Where the savings come from
In addition to R12bn in savings identified in the February budget, a further R38.1bn has been found over the next three years. The biggest chunk, R13.1bn, comes from tackling fraud and tightening verification in social grants. Another R11.7bn comes from cutting low-priority programmes, duplication and administrative waste in national departments, and R5.5bn from cash surpluses in public entities.
The remaining R7.8bn comes from pausing the human settlements development grant. “Programme inefficiencies and rent-seeking mean that we are spending less on building houses,” Godongwana said.
Hunting ghost workers
A payroll audit by the Treasury and the department of public service & administration has flagged 4,323 “high-risk, suspicious cases” of ghost workers — fictitious, dead or unverified people drawing state salaries. The Treasury is working with the Financial Intelligence Centre to investigate high-risk officials and will report the findings in the 2027 budget.
In all, 27,450 applications for early retirement and voluntary exit packages have been approved. After the initial exit costs, the programme is projected to save R4.3bn in 2027/2028, rising to R4.6bn in 2029/2030. The public service wage bill is still set to grow 3.9% a year, from R760.7bn this year to R850.4bn in 2029/2030.
More money to fight GBV
Some of those savings will be redirected to fighting gender-based violence. “A spate of recent murders and attacks on women shines a spotlight on this national crisis,” the Treasury said.
In response, it has redirected R3.8bn over the next three years to appoint 3,552 social workers and strengthen prevention, early intervention, psychosocial support and victim empowerment. A further R157.4m goes to the department of women, youth & persons with disabilities to improve national co-ordination and oversight, and R186m to forensic services, investigative capacity and backlog reduction.
The number of sexual offences courts is projected to grow from 55 in 2026/2027 to 101 in 2028/2029, and Thuthuzela Care Centres, which support rape survivors, from 72 to 80 over the same period.
A new fiscal anchor
The Treasury has also released draft fiscal anchor legislation for public comment, which is expected to be tabled in parliament in 2027. It describes the anchor as part of “the most extensive reconfiguration of the public finance system since 1999”.
Rather than setting a rigid numerical rule, the draft includes fiscal sustainability in the Public Finance Management Act as a standard. After each general election, the incoming cabinet must approve a fiscal plan setting out its objectives, consistent with its electoral mandate. The government must then report against it at every budget and explain any material deviation to parliament.
“Fiscal sustainability cannot depend on the commitments of a single administration,” Godongwana said. The Financial and Fiscal Commission will be given a new responsibility to report independently on whether the fiscal framework is consistent with the administration’s fiscal plan.
Bond buybacks
The government will run a bond buyback programme this year to reduce elevated redemptions over the medium term, although it couldn’t be specific on what kind of maturities would be targeted, as this would depend on market conditions.
Pieterse said the timeline for a Eurobond has not been finalised. The Treasury is focusing first on concessional funding from lenders such as the World Bank and the New Development Bank, and only if that funding falls short of about $5bn would discussions on a Eurobond start.
