Finance Minister Enoch Godongwana, delivering his budget speech in Cape Town, announced that the general fuel levy on petrol will go up by 16 cents per litre starting in June. While intended to boost revenue without raising Value Added Tax (VAT), the decision has been met with criticism from labour representatives.

Mojalefa Musi, a labour analyst based in SA, described the budget as regressive, arguing that the fuel levy increase will erode workers’ earnings and inflate the cost of basic necessities.

“Scrapping the VAT increase only to raise the fuel levy is essentially shifting the burden from one pocket to another,” Musi said. “Transport accounts for around 40% of an average worker’s income. By raising fuel costs, you're not just affecting transport, you're pushing up food prices and other essentials as well.”

The hike comes at a time when SA households are already grappling with high unemployment and rising inflation. Musi warned that the knock-on effects of the levy could worsen the financial strain on working-class families and undermine economic recovery.

The 2025 budget includes a range of tax adjustments aimed at narrowing the fiscal deficit, but critics say the government is leaning too heavily on the shoulders of those who can least afford it.

--ChannelAfrica--