Fuel Levy Hike to deepen strain on economy & consumers: AA

The Automobile Association (AA) says the looming fuel levy increase will have far-reaching consequences for the economy and for South Africans already struggling to make ends meet.

Finance Minister Enoch Godongwana successfully tabled the country’s budget in Parliament on Wednesday, after two failed attempts, both derailed by objections to the proposed VAT hike.

The minister, however, reiterated that the tabled policy statement is not an austerity budget, adding that more taxes will be introduced next year to generate R20 billion.

The increase in the fuel levy was one of the minister’s biggest announcements.

Starting from June 4, the levy on petrol will increase by 16c to R4.01 per litre and diesel by 15c to R3.85 per litre on 4 June 2025. This is the first increase in three years.

The AA warns that this hike will place even greater pressure on already burdened households.

The association’s Eleanor Mavimbela is calling for a forensic audit into how the fuel levy funds are being used.

“This levy adjustment comes at a time when South Africans are already contending with high food prices, elevated interest rates, increased electricity tariffs and persistently high unemployment.

“Fuel is a critical input cost across all sectors of the economy, any increase inevitably drives up transport  and operational costs further intensifying inflation.”

Mavimbela says lower income households which spend a greater share of their income on transport, will be disproportionately affected by the hike.

Health

The minister also announced a R20.8 billion boost over three years to hire about 800 post-community service doctors. The current provincial health budget stands at R845 billion over the medium term.

The Rural Health Advocacy Project, says it’s important that the doctors are equally distributed between urban and rural facilities, to ensure that the country’s rural patients also receive quality service and equitable access to healthcare.

The organisation says while they welcome the move by the treasury to hire post-community service doctors, the minister failed to provide solutions to the funding gap created by the withdrawals of US aid.

Earlier this year, US president Donald Trump announced a 90-day freeze on foreign aid which subsequently led to the halting of over 80% of USAID programmes.

Basic education

Godongwana announced that the provincial education budget baseline for the next three years is set at R1.04 trillion.

An additional R9.5 billion has been allocated to retain teachers and hire more staff over the medium term.

The South African Democratic Teachers Union (SADTU) says this measure is critical for sustaining education quality and managing class sizes.

The union says it is however concerned that the budget made no mention of school safety.

Sadtu’s Nomusa Cembi says schools  are vandalised and robbed on a daily basis.

“Learners bring to schools all assortments of dangerous weapons and the security personnel in schools do not have the skills nor resources to tackle these.

“SADTU remains committed to quality public education, which we believe is only achievable if the government adequately funds the sector.

“Funding education is not wasteful expenditure; it is an investment in South Africa’s future.”