Fuel levy windfall: City of Cape Town to get over R3bn for road maintenance
The City of Cape Town will receive R3bn from national government for road maintenance.
Image: File
The country’s eight metropolitan municipalities will share nearly R16 billion in general fuel levy revenue allocated by Finance Minister Enoch Godongwana to fund road maintenance.
According to Godongwana’s allocations for the 2024/25 financial year, the City of Johannesburg will receive nearly R4.7bn, while the eThekwini Metro’s share is just under R4.1bn, and the City of Cape Town will get over R3bn.
The City of Tshwane’s allocation is R1.87bn, and the Ekurhuleni Metro gets R1.79bn, while R853.5 million will go to the Nelson Mandela Bay Metro.
The Buffalo City Metro and Mangaung are allocated R828m and R414.4m, respectively.
During his Budget Speech in February, Godongwana announced that the general fuel levy will go up by nine cents per litre for petrol and eight cents per litre for diesel.
At the time, Godongwana indicated that fuel prices remained subdued, and proposed that from April, the general fuel levy would increase by less than inflation to R4.10/litre for petrol and R3.93/litre for diesel.
The general fuel levy is described as a general tax intended to fund road maintenance, but it is not ring-fenced and flows directly into the National Revenue Fund.
In addition, the minister must, for each financial year, determine an equitable allocation to be made to each metropolitan municipality.
Following the start of the US and Israel’s war against Iran, Godongwana and his Mineral and Petroleum Resources counterpart, Gwede Mantashe, announced a temporary reduction in the general fuel levy of R3 per litre from April 1 to May 5, to provide limited short-term relief to households from rising fuel prices due to the Middle East conflict.
The ministers stated that the relief measure was designed to be fiscally neutral, and the government will implement mechanisms to recoup the foregone revenue within the fiscal framework approved during the 2026 Budget.
They also said that, given the large expected increases in the price of diesel, further temporary relief for diesel was increased by 93 cents to R3.93 per litre, reducing the levy to zero, from May 6 to June 2, which meant the general fuel levy for petrol will remain at R1.10 per litre and the general fuel levy for diesel will decrease from R0.93 per litre to zero.
From next month, the level of relief is halved to phase out the relief before July.
“As a result, the amount of relief from the general fuel levy will be reduced to R1.50 per litre for petrol and R1.96 per litre for diesel, effective from June 3 to June 30.
“This will increase the general fuel levy for petrol from R1.10 per litre to R2.60 per litre and increase the general fuel levy for diesel from zero per litre to R1.97 per litre,” Godongwana said last month.
It is expected that from July onwards, the general fuel levy for petrol will return to R4.10 per litre and R3.93 per litre for diesel.