The temporary reduction in fuel levies announced in the Medium-Term Budget Policy Statement (MTBPS) will provide some relief to South Africans facing rising living costs, but questions remain about whether taxpayers are getting value for the money they already contribute to government.

The Organisation Undoing Tax Abuse (OUTA) welcomed Finance Minister Enoch Godongwana’s R10 billion fuel levy relief package, while warning that wasteful spending, deteriorating infrastructure and poor financial management continue to place pressure on households and businesses.

Godongwana announced temporary cuts of R1.50 per litre for petrol and R3 per litre for diesel from 4 November until 1 December, followed by smaller reductions until 5 January 2027.

OUTA said the intervention would offer some breathing space as transport and food costs rise, but argued that temporary relief would do little to address the underlying problems facing taxpayers.

“South Africans are feeling the pressure every time they fill their tanks, buy groceries or pay for transport. This relief will help, but only temporarily,” said OUTA chief executive Wayne Duvenage.

The organisation pointed to a Treasury review of R887 billion transferred to provinces and municipalities through infrastructure conditional grants between 2017/18 and 2023/24, raising concerns about whether public money has consistently translated into functioning infrastructure and improved services.

Billions spent, but where are the results?

According to OUTA, the review found that infrastructure projects were frequently delayed, left incomplete or failed to deliver their intended benefits. The organisation stressed that this does not mean the entire R887 billion was wasted, but said the findings raised questions about accountability and the consequences of poor project delivery.

“Spending the money is not the same as doing the job. Treasury must tell South Africans which projects failed, how much was spent, who was responsible and what action has been taken,” Duvenage said.

Local government funding is another concern. The MTBPS provides an additional R21.8 billion to the local government equitable share over the medium term to help municipalities meet the rising costs of delivering basic services.

However, OUTA argued that many municipalities allocate too much of their budgets to operating expenses while failing to invest adequately in infrastructure maintenance.

“When municipalities collect money for electricity and water but fail to maintain those networks, residents pay twice. First through their municipal bills and then through the cost and disruption of failing infrastructure,” Duvenage said.

Relief at the pumps, pressure on households

The property sector also welcomed the temporary fuel levy reductions, while cautioning that broader economic improvements will be needed to ease the pressure on consumers.

Dr Andrew Golding, chief executive of the Pam Golding Property Group, said the intervention would help cushion households and businesses against higher transport and operating expenses.

“Higher fuel costs have implications well beyond motorists, influencing transport, distribution, food prices and inflation more broadly,” Golding said. “While the relief is temporary, it offers some breathing space for households and businesses facing mounting costs.”

Golding said sustained improvements in housing affordability would depend on stronger economic growth, employment creation and access to competitive home financing.

Samuel Seeff, chairman of the Seeff Property Group, described the MTBPS as “a stable and fair fiscal plan under challenging macroeconomic conditions”.

He also called for interest rate cuts to ease pressure on consumers and support demand in the housing market.

Growth remains a key challenge

Momentum Group economist Sanisha Packirisamy warned that temporary fuel relief would not insulate consumers indefinitely from elevated international oil prices.

Packirisamy noted that Treasury had lowered its economic growth forecast for 2026 to 1.2%, from the 1.6% projected in February. Treasury also revised its non-interest spending envelope for the year upwards by R45 billion.

The additional expenditure is intended to support areas including health, education, local government and regulatory enforcement, Packirisamy said. However, stronger economic growth and consistent infrastructure delivery remain important to achieving lasting improvements.

OUTA also called for scrutiny of Treasury’s planned R38.1 billion in medium-term savings, including measures aimed at tackling social grant fraud and ineffective programmes.

The organisation cautioned that efforts to eliminate waste should not penalise legitimate grant beneficiaries or undermine essential public services.

The debate over the fuel levy relief therefore extends beyond the immediate cost of filling up a vehicle. While the temporary cuts offer motorists some breathing space, OUTA argues that better financial management and improved service delivery are necessary if taxpayers are to see lasting benefits from public spending.

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