Efficient from the 4th of June 2025, the Common Gas Levy will likely be elevated by 16 cents per litre for petrol and 15 centre per litre for diesel. The AA has warned that regardless of it not being elevated up to now a number of years, this will likely be a bitter capsule to swallow for money strapped South Africans. 
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Finance Minister Enoch Godongwana introduced the hike as the only real new tax measure within the 2025/26 fiscal yr, attributing it to inflationary pressures. He emphasised that the adjustment is important to deal with fiscal challenges, particularly after the federal government scrapped a proposed VAT improve earlier this yr. For the reason that South African authorities’s choice to extend the Common Gas Levy (GFL), widespread concern has arisen amongst motorists, trade stakeholders, and opposition events. As a reminder, the Common Gas Levywill rise by 16 cents per litre for petrol and 15 cents per litre for diesel, marking the primary such improve in three years.
The Automobile Association (AA) has expressed sturdy opposition to the levy improve, warning of its quick and far-reaching penalties. “This levy adjustment comes at a time when South Africans are already contending with excessive meals costs, elevated rates of interest, elevated electrical energy tariffs, and persistently excessive unemployment,” the AA acknowledged.
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The AA additional highlighted that with the brand new changes, the mixed value of the GFL and the Highway Accident Fund (RAF) Levy will exceed R6.00 per litre in some areas, accounting for greater than 30% of the overall pump worth earlier than including the bottom gas value, distribution margins, and retail mark-ups. On the highest stage of opposition, political events have also voiced considerations. Members of Parliament from varied events argued that the gas levy improve is a regressive tax that disproportionately impacts lower-income households. They accused the Nationwide Treasury of changing the scrapped VAT hike with the gas levy improve with out contemplating various income proposals, equivalent to wealth taxes.
In response to the backlash, the Nationwide Treasury clarified that the gas levy improve is according to anticipated inflation of round 4% and isn’t meant to interchange the VAT improve. Chris Axelson, appearing head of tax and monetary sector coverage on the Treasury, acknowledged that the gas levy adjustment is predicted to generate roughly R4 billion, considerably lower than the R75 billion anticipated from the proposed VAT hike.
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Regardless of the levy improve, motorists could expertise a slight reprieve in June gas costs as a consequence of beneficial market circumstances. Knowledge from the Central Power Fund signifies an over-recovery of 19 cents per litre for petrol and 48 cents per litre for diesel, which may offset the affect of the levy hike.
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The AA continues to name for a complete and clear evaluation of South Africa’s gas pricing mannequin, together with a forensic audit of income generated from the GFL and RAF Levy, full transparency on the gas price-setting system, and exploration of different funding mechanisms that scale back reliance on fuel-based taxation.
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